Mr. Wazobia a seemingly successful Publisher, was recently seen complaining bitterly to his friend, "I have over ten thousand copies of a certain book title in my warehouse for almost half a decade and no single copy had been sold in the last three (3) years. The books are occupying a reasonable portion of my Warehouse and I'm ultimately worried about loosing my entire investment on this particular book".
Millions of people globally are in such predicament created by either over-stocking or stagnant inventory. Excess or stagnant Inventory is always a tricky thing to handle and if it is not well managed,the consequences can drastically affect the perpetual existence of the business.There is always that urge to wait and see it the items will sell to justify the initial investment.But chances are that is not going to happen. Each day that old inventory sits on the shelves, you are loosing money.
Whether you are selling these items for a profit, at cost or even at a loss, it is now time to clear that stagnant Inventory ! Embark on Sales Promotion.
In a down-to-earth terms, sales promotion is a way of lifting sales temporarily by appealing to economic motives and impulse-buying behaviour. Sales promotion is used to introduce new products,clear out inventories,attract traffic, and to lift sales for a period of time. However, holding promotions too frequently will habituate customers to buy only when promotions are in effect. Avoiding promotions altogether will let competitors draw customers away. Therefore, Sales promotions must be carefully calibrated to achieve the desired purpose(s).
Here are the three (3) best Sales promotions to run in an attempt to clear Stagnant or excess Inventory:
1. Bundling
A product on its own may not be selling, but pairing it with a big seller can be all that it takes to get them out of the Inventory warehouse. Take products that are not selling and bundle them with order related products that tends to sell very well.
2. Buy-one-get-one-free (BOGOF)
This is an example of a self liquidating Promotion.It is a customer-oriented Sales promotion and the price deal work most effectively. As a consumer price deal type of sales promotion, consumers enjoy this type of sales promotion because of its non-ambiguity.
3. Clearance Sales
This is a bit tactical, it is not as simple as it may seem. One needs to be strategic about it. First introduce the sales with a smaller discount Amount from 10%-25%. This way, you may be able to salvage some profit margin off the product. If these items are still stagnant,an heavier discount of 35%-50% may be given with great consideration for the production cost of these items.
Moreso, rather than giving cash discounts, using stagnant, slow-moving or excess stock is more economically viable to any form of business. For instance, instead of a Supermarket giving 10% discount off purchases from10,000 naira which is equivalent to1,000 naira, the same Supermarket could use any of her slow-moving/Stagnant inventory item (e.g a particular Can food) that sells for the same or almost the same amount of the discount. This Supermarket by this singular action had succeeded in introducing the product to new prospects and that could also Improve the sales of such slow - moving or stagnant stock.
Conclusively, as we all know that the effects of stagnant or slow-moving inventories can be quite frustrating but using them as items of sales promotion could turn the table around!
For more on;
Inventory /Stock management and Consultancy
Call: DEFINITITUDE Concepts
Tel: 07088862700 & 09020002930
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