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Top 5 Tips for Managing Old Stock

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Managing Stock

Do you ever find that you have old stock in your convenience store that you just can’t sell? Sometimes you don’t know what to do, the prices are already small, the products may look tattered and you need to fill the space with new stock that will sell faster. What can you do? We’ve put together our top 5 tips on how to manage old stock in your convenience store.

  1. Donations

Donating your stock to a local charity or organisation such as a theatre group means that you can get rid of stock quickly. You should also be able to build on marketing your convenience store by having a free ad in a programme or leaflet. Make sure that that the merchandise has a fairly decent shelf life and that the quality is good. Obviously there’s no immediate profit to be made here but you will be clearing your shelves to make way for new better selling products whilst raising your profile.

  1. Stabilise inventory

This option relies on intuition, some planning and the right demographics. Let’s start with an example. You have too many carbonated drinks by unknown brands and they just won’t sell. One option would be to remove all well known brands of carbonated cola, orange and lemonade from your shelves and only display the unknown brands. Your customers will have no other choice than to buy the remaining stock – they do need to be indifferent to branding though! This might take a little bit of planning as you may want to carry out some risk management using your POS system to see how well these products sell throughout the year, there may be periods when they are more profitable than others – you don’t want to jeopardise making no profit at all.

  1. Gift Promotion

Try wrapping up the stock and giving customers a free gift every time they spend £10 or whatever amount you choose. This would be particularly successful leading up to Christmas and builds customer loyalty. Again, you won’t be making a profit on the old stock but customers may be encouraged to buy more if there is an added incentive.

  1. Bundles

Try putting all the products together in a ‘bin’ and offer the products at 5 for £5 or whatever price you prefer. They should get snapped up fairly quickly.

  1. Strategy

All of the above are great solutions which can be implemented quickly with little or no planning. However, it’s important to have a strategy in place so that you can forecast and plan for this situation. Using your EPOS system and accounting information (such as supplied by cloud accounting system CounterBooks) you should be able to identify patterns in stock sales and forecast when you may have too much old stock. You can then have a planned lifecycle, implementing offers such as discount sales or buy one get one free at the end of every quarter or whenever you have planned.

Author: retailaccounting

CounterBooks is an online retail accounting management suite which is used by retailers across the world.

One thought on “Top 5 Tips for Managing Old Stock

  1. These are all good tried & true methods to reduce inventory; however, it is always best to prevent rather than react.

    1. When one begins to sell inventory at cost or at a lost, one “trains” customers to look for bargains. It becomes difficult to sell at a profit. One is then in the business of churning merchandise, not making a profit. You are catering to bottom feeders. Your higher margin items sit until they become stale and then get moved to the discount shelves.
    2. Discount merchandise cannabilizes your higher margin items. Unless an item isn’t a gift, who isn’t going to choose a lower price over a higher one.

    There are some other ways and considerations in reducing your overstock. All of the ones provided are excellent.

    1. Move the inventory. Frequently inventory does not sell because of location. Don’t discount merely because it is in a bad spot.
    2. Consider raising the price. Yes! Unless the product is damaged or physically old looking, raising a price can make things look more valuable.
    3. Rather than approach your orphans as items you need to get rid of, feature them in an area of your store as “last chance” for the customer. “Limited supply,” or “supply shortage” comments make people buy.
    4. Ask your vendors to take back or rotate their inventory.
    5. Ask other vendors if they will “purchase” competitors inventory to make room for theirs or to give you a special discount.
    6. When selling, it is better to sell 2 for 1 rather than 50% off. The discount is the same to you, but you will move your inventory faster, and that is your goal.
    7. Try other creative means to move inventory such as the grab-bag. Offer $10 worth of product in a paper bag marked $3. You carefully select product with getting rid of smaller items you cannot get rid of with better quality items..
    8. Use your database (if you have one) to identify previous purchasers of the stale products and market the stale items to them at heavy discounts. You know they already are prime targets.

    Remember, it is all about profit and buyer psychology.

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