Buying When You Already Have Too Much Inventory

Many small business owners are inspired to own their business because they want to surround themselves with their passion, hobby, or interests. While this can prove successful for some, it can also prove challenging for others when it comes to retail. For most people, buying for your store is not as easy or as fun as shopping for yourself.  In fact, it can be down right difficult, frustrating, and scary. Suddenly, a big “for sale” sign isn’t as exciting as it use to be for you since the possibility of what you buy for your store may end up on a sale rack if it does not sell well.  Because it’s your sale and your money, this can bring added stress to the already endless list of stress that the world of retail has.  However, that said, sales are part of the package when you sign up to work in retail, however there are ways to help limit how much of your inventory ends up on the sales racks.

To help control inventory, particularly in an economy when shoppers aren’t separating themselves from their wallets as easily as before, retailers should take a complete analysis of the current inventory assortment based on the points below. Consider how these points will help you with your current inventory sell through so that when you make future buy decisions, you will find your inventory balanced more evenly and your register filling up more quickly.

Product Sell-through vs. Square Footage of Product Allocation

How much space does the product you sell take up in your store? Is the product in your store that is not selling taking up more space? The goal is to maximize your store with products that are moving. You should markdown the product that is not selling to help increase the chances of it selling sooner, eventually opening up your store space for more products that have proven successful. It also allows your open to buy dollars to become more available, allowing you to potentially introduce new product. Make sure that you do not let slow moving product sit on your floor too long without marking it down, then make sure to continue to mark it down until it sells. It is wasted space if it is just sitting there. The first 30 days of any new product on your floor should allow you to understand if customers want this or if you will need to mark it down eventually. The goal is to have the products that sell faster, or even at all, take up the majority of your floor space. We all make poor buy decisions, so deal with these mistakes if necessary to get to where you want to be next time in your buying decisions.

Product Hot Spots and Weak Spots

By now, as a retailer, I am sure you have discovered the power of merchandising. Whether you have or have not paid much attention to this, make sure that you take the time to determine the retail real estate in your store that helps move products while on the contrary, determine your store space that doesn’t seem to help increase product sell through. By understanding this, you can maximize your sales. There is always going to be “dead space” on your floor and like it or not, you may need to use this space to merchandise some of your product. Make sure you merchandise and re-merchandise your product routinely so that you offer customers a refreshed shopping experience, but also the opportunity to move products from the hot spots to the weak spots and vice a versa as needed.

A merchandising note – If you have product that customers come to your store for, this is the product to put in a weak spot versus a hot spot since they already know they want it. Use your hot spots for products that you need to sell, not only the ones you know will sell. Mix it up!

Excess Inventory Control

Unless you are one of the few retail buyers who is always on target with what their customers want and you know will absolutely sell, it’s possible you have extra inventory sitting around. The goal for you is to move it. And move it now! Don’t wait for the possibility that it may come back in style or that the economy will get better. Mark it down and get it sold. Hold a special sale. Or sales. Offer discounts for special customers. Whatever your plan is, the plan should be to not let this product take up space on your retail floor or in your back room – even if you hate the thought of selling it for less than you planned to.

Controlling Your Buys

It’s so tempting to bring in a ton of great new things to your store and just start over, so to speak, when you have a lot of things that you know are not working for you. BUT – hold back. Find control and find balance to bring these new items in without cornering yourself in a position where your current inventory will financially put you in a hole. Unless you have the resources to be flexible and to buy without concern, then make sure you strategically plan to get your currently inventory out of your store before bringing in a ton of new things. I don’t believe that you can hold off on buying anything new, however. Customers want to be surprised and tempted and enticed to buy, so you need to give them that with what is in style, with what they want, and with what you know they need. That said, find balance and control with what you already have and what you want so that you can better manage your inventory needs.

Still looking  for more help? You may check AdvanceWare for its scalable and flexible inventory software ( that is suited for Quickbooks users, wholesalers, distributors, online retailers, importers/exporters, 3rd party logistics warehouses, and any other inventory-based businesses to help you in your inventory needs. In addition, you can find some video demo at





  • Christopher Marshall
    February 10, 2009

    I know I will lose money by marking some inventory down, but I won’t make any money at all if it never sells at regular price. I need this push though. I am struggling here to keep me store open.

  • Sarah of Chic Gems
    February 10, 2009

    I have overstock on certain products. What is the best way to clear out without being the “sale queen”?
    I don’t want to compromise the brand and become “Wallmart”

  • Nicole Reyhle
    February 10, 2009

    Sarah, I would suggest consignment selling. If your inventory is just sitting in stock without doing anything for your business, consider positioning it in select retailers that will at least provide a new outlet for consumers to view and hopefully purchase your product.

    In this economy, independent retailers are less likely to buy new lines BUT they are more likely to consider consignment selling for products they like. It’s not ideal for you as a wholesaler but it does help. You can also create a contract with retailers that after so many items sold, they will then re-evaluate purchasing your product up front versus through consignment.

    I hope this helps!

  • Amanda
    February 11, 2009

    Nicole, your advice to Sarah is excellent. I’m a small business owner and I’m really feeling the crunch of buying merchandise outright. I’d like to see more designers willing to sell their product on a consignment basis, but the reality is that they’re leary to do so.

  • Nicole Reyhle
    February 11, 2009

    Amanda, I am glad you agree with consignment selling being a beneficial tool for retailers and wholesalers BOTH. I definitely think wholesalers need to be strategic about where they place their product and how many retailers they choose to do consignment selling with, but it should definitely be part of their sales strategy if they have too much inventory in stock or want to get a name for themselves in the market place – particularly in this economy! Thanks for commenting!

  • Dan Jablons
    August 9, 2010

    The main thing is to get a true open to buy program in place, so that this doesn’t become an ongoing issue. Solving the issue of buying when you already have too much inventory is like saying, “I’m bleeding, I need a transfusion” before you stop the bleeding!

    We do a free analysis for retailers who need help in this area.


    Dan Jablons
    Retail Smart Guys
    Cell: 818-720-2585
    Fax: 818-897-7223

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