Seven Ways to Deal with Deadstock
Deadstock is the worst nightmare for anyone dealing with inventory. Companies go out of their way to prevent this and try their best to get rid of the inventory that stocks up. Deadstock refers to any inventory or merchandise which is unsold. Some of this inventory can cross its shelf life, some may lose demand while others become completely obsolete. Trends keep changing and are overshadowed by fads, which rise quickly and are also forgotten about just as fast. This is the reason why most goods become popular instantaneously but also become out of fashion. This causes them to become deadstock since they are in supply but have no demand anymore.
Some luxury brands get rid of deadstock by destroying leftover inventory and disposing of it so that their merchandise is not acquired by anyone who cannot afford their products. These products include jewelry, clothes, undergarments, bags, and accessories. They don’t have a shelf life as such but they need to be sold on time so that they are still considered to be “in style” and are still wanted by the masses. On the other hand, there are perishable items such as food, beverages, makeup, skincare, and toiletries. These have to be thrown out and wasted if they are not sold on time since after their expiry date, they can pose a threat to the health of consumers.
One way to manage inventory properly and avoid deadstock is to employ the use of inventory management software. This software can give out alerts if there is anything that is out of stock or if some items have been in the inventory for a longer time than they should have. It uses past data to come up with demand forecasting and can let inventory managers know when they should reorder. Barcode scanning has made it easier for inventory to be recorded seamlessly as only one scan then records the data. For this reason, inventory management software can help save costs and prevent deadstock.
There are many other ways to deal with deadstock and prevent losses for companies and businesses.
1)Classification of Stock
Inventory managers need to be more mindful and should classify their stock according to the speed with which they move out. They can be sorted according to their shelf lives, the number of sales, number of returns and exchanges, and the demand for the product. This helps them be prepared to deal with inventory better so that they can help with increasing the turnover of slow-moving items. They can come up with better plans to help move the stock out and strategize properly. This way, they will not be blindsided by the accumulation of stock and will be prepared to deal with it.
2) Discounts and Promotions
Deadstock items can be sold at discounted prices so that customers can be incentivized to buy those items. These items can also be given away to high-selling products so that the inventory is turned over quickly. Companies often collaborate with each other and come up with deals to entice customers. Most of the time, this marketing tactic works and customers end up buying items which would have become deadstock. This strategy is a win-win situation for both parties and is a lucrative venture. You can add customer loyalty programs and customers can also be given coupons or discount codes online to help them avail special discounts.
3) Repurpose and Rebrand
This step can be mostly taken by larger businesses since they have the budget to account for losses and have a margin to accommodate products which do not move out too quickly. These products can be repackaged too. This can attract customers and lure them into buying the product more quickly. Smaller businesses can also do the same by making smaller changes which they can afford. This revamps the entire product and draws a customer’s attention since they are curious about the changes made to the product.
4) Return to Suppliers
Companies often underestimate the importance of supplier relationships. When something goes wrong in the supply chain, a poor relationship with the supplier can lead to unnecessary delays but having a better relationship can get rid of problems companies could have never even thought of. Suppliers often do have policies in place to deal with inventory management and go out of their way to assist companies and help them get rid of the stock.
5) Donation
Most brands take corporate social responsibility very seriously and have many projects to ensure that they are giving back to the community. If they have some deadstock which is still usable and does not violate food and health policies, they can donate it so that it is still usable and can count this as an initiative for corporate social responsibility. This is also the more ethical thing for them to do, especially if the stock will go to waste.
6) Better Forecasting
Forecasting can help with the planning process. Companies which use forecasting tend to predict which stock will go out first and which one has the probability of accumulating. This is the reason why forecasting prevents inventory managers from running behind schedule. It will also help them be more mindful in the future so that they do not make the same mistake and can take action on time.
7) Training Sales Teams
Salespersons can be trained in how to sell slow-moving items which can in turn prevent deadstock. If they put in a considerable amount of effort and can say the right sales strategies to the right person, they can help ease up the inventory and sell products which were unable to gain traction. They can also be incentivized through bonuses and commissions which will further motivate them to sell better.
Conclusion:
Deadstock is undesirable for any company regardless of its size. No inventory manager wants to see stock pile up without being able to sell it first. There is a lot of planning that goes into moving stock from the factory to the warehouse and eventually a retail shop. If the aforementioned points are followed religiously, inventory managers can easily deal with deadstock and can also help it become a fast-moving good.
