Re-Inventing Old Inventory
If you are like most retailers, you are probably sitting on some inventory that has been around longer than you would like. You know this too well and most likely, your customers know this too. So how can you bring old merchandise new life? Here are a few tips to help you re-invent some products so that it has a new meaning to your overall product assortment.
1. Create gift baskets. Of course, this will only make sense if your store would be able to sell gift baskets. Consider grouping some products together and selling them in a package for one price. Retailers that are best suited for this type of selling include baby stores, gift shops, bath and body shops, accessory stores and general merchandise stores.
2. Re-arrange your floor plan to give the appearance of new products. Sometimes all it takes is moving your floor fixtures around and merchandising your products differently for your customers to think there are some great new products in your store. Time and time again I hear clients tell me they have customers buying things that have been on their shelves for months but because they re-arranged their store, the customer is now seeing this product for the first time. See how this may work for you.
3. Make a trade with another retailer. Have some retailer friends in another city? Reach out to see if other retailers would be interested in trading what isn’t working for you but may work for them for something that they would like to see go from their store, as well. Be creative with how you make this happen. Many retailers find great partners in retail friends through doing this, but it is usually best suited for retailers outside of your own community. If you don’t have retail friends like this, try and make some at your next trade show. They are great for a variety of reasons! And stay tuned – Retail Minded will be introducing a way for retailers to connect very soon!
4. Make your products an incentive with other purchase. In other words, have a table/rounder/bin of products you are looking to finally get out the door that are available at a discount with any purchase. Make the discount worth their wild, though. 50%, 60%, 75% off…. price to sell here! Sure, you may come out even or at a small loss – but the alternative is excess inventory sitting in your store and making no money at all on it… plus suggesting to customers that your product isn’t selling. No one likes to shop at stores that has a slow turnover of inventory (with some exceptions).
5. Merchandise your products in a new light with other products. Have a shirt that just isn’t selling? Layer it under this season’s hottest vests and see what it does for it. Think of new ways to sell old product through merchandising them with other products rather than highlighting them on their own.
6. When all else fails, ebay it. Craigslist, ebay and other online sites can give relief to retailers. Consider how this avenue may be right for you.
At the end of the day, the goal is to get your inventory out your door. If you are holding onto Fall 08’s products or older, you really need to figure out a way to sell them now. Start talking with retailers about a trade that will be ready and done for Fall 09. Re-invent your floor space through merchandising. Create package deals to sell old goods. Whatever you do, make it happen. Yes, easier said than done – but not impossible. Have ideas yourself? Let us know!
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Ted Hurlbut
Here’s what I recommend to my clients:
1. Can you return it? You never know until you ask. And if you ask firmly, and structure your request as a win/win proposition, most vendors will be reluctant to respond with a flat out “No”.
2. Segment the inventory. It is critical to recognize that dead inventory is made up of merchandise with dramatically different characteristics and market value. I recommend breaking your dead inventory into three categories; low hanging fruit, sludge, and everything else.
3. Low hanging fruit is the most desirable inventory, the most marketable, and the easiest to sell and turn into cash quickly. It’s the quick win. Start here. Break it out from all the rest, feature it, sign it, price it to move, and get your cash.
4. Sludge. We all know intuitively what sludge is, it’s the bottom, the worst, the oldest, most shop-worn, most outdated. And when you see it mixed in with other inventory, it makes everything else look like sludge as well! So get it off the sales floor, away from the other inventory, and most importantly, away from you customers. The ugly truth is that sludge has little or no market value.
5. Everything else. Not as desirable as the low hanging fruit, or as toxic as the sludge. As you sell through the low hanging fruit, slice off the next most desirable layer of inventory from this category, feature it, sign it, and price it to move. Understand that each successive layer of inventory is likely to require a greater discount to stimulate customer response. As you go along, in fact, the least desirable inventory in this category will likely start to look and feel more and more like sludge, which is a good sign that you’re near the end of the process.
6. Selling dead inventory is not like running a clearance sale. If you attempt to move it merely by taking an additional markdown without remerchandising it, as you might with clearance merchandise, you only reinforce in the customers mind that it may not be desirable even at that new, lower price.
7. Develop merchandising and selling strategies to minimize the impact on your regular business. The last thing you want your store to look like is that it’s going out of business. This is why a slow, steady approach works best, so that your dead inventory never represents more than a small piece of your overall offerings.
8. Price it to move. Forget what you paid for it, it’s not relevant! What is relevant now is the price your customers will pay for it, now!