Negosentro | Where to sell your overstock inventory in the Philippines | Inventory management is one of the most critical processes for any business to grow and thrive in a competitive landscape. In fact, the quality of your inventory management can make all the difference between your business’s profitability or bankruptcy.
There will be times when managing your inventory can feel like a balancing act, with ‘just the right amount’ of merchandise to store and sell varying according to the ever-changing consumer demand, trends, and other unpredictable factors. More often than not, businesses find themselves dealing with a ton of unsold inventory that only gets increasingly more difficult to sell. One of these types of stock is called overstock inventory.
What is overstock inventory?
Overstock inventory can be defined as the merchandise businesses are left with when they purchase more products than they are capable of selling.
Oftentimes, businesses overlook this type of inventory, keeping them on their shelves for too long, believing that they will eventually be sold. However, seasonality, trends, and consumer demand can fluctuate and change quickly, resulting in these items stagnating in stockrooms or in the warehouse and depreciating in value over time.
Companies dealing with this type of inventory will soon find that selling overstock items at full price can be very difficult. The sad news is their lower value is just one of their many disadvantages.
Let’s go over the other disadvantages of overstock inventory
Disadvantages of overstock inventory
It takes up warehouse space
If your business model involves merchandise, then one of the most valuable elements that you must be mindful of, alongside inventory, is warehouse space. Overstock inventory takes up valuable real estate that could have been allocated toward new or better-selling items.
It ties up cash flow
Unsold inventory equates to an unrecovered amount of capital. Ideally, the capital you invest in your merchandise returns to you in the form of profit generated by selling these items. However, overstock inventory holds this capital hostage making it unavailable for the purchase of new items, development of new products, and more.
It increases holding costs
Holding inventory in your warehouse comes with its own costs, including but not limited to the temperature, lighting, insurance, and security it takes to keep these goods in sellable condition. Add the measures taken to manage and audit your inventory and the labor needed to keep the warehouse running. All these costs can add up resulting in your overstock inventory eating away at valuable capital better allocated for other uses.
It depreciates in value
Inventory adheres to its own lifecycle and as time passes, its value decreases. This may be due to multiple factors such as damage and misplacement. However, overstock inventory’s value often depreciates due to a decrease in consumer demand, shifts in the market, or obsolescence.
Liquidating your inventory as the solution
Managing your overstock inventory can be tricky but that doesn’t mean that it needs to represent a complete loss of capital. There are plenty of avenues a business can take when it comes to sorting this type of inventory out. One of the most viable and effective ways is to liquidate.
Liquidation is the process undertaken by a company that decides to sell its inventory in order to recover a portion of the capital invested in its merchandise.
This process is often mistaken as a last resort turned to by failing and bankrupt companies. However, even if your business is booming and operations are running smoothly, liquidation is still a wonderful way to sort out any inventory-related kinks in your business and get those overstock inventory moving.
While there are plenty of ways to go about inventory liquidation, one way to ensure that the process goes smoothly and produces your desired results is to partner with a liquidation company. These experts can help businesses figure out what to do with their unmoving assets and offer 360° guidance and assistance throughout the process of evaluating and selling their overstock inventory so they can recover the maximum amount of value from them.
Liquidation can help relieve you of the burden of carrying excess inventory—and all the harmful effects that come with it—so you can divert your energy towards more urgent business matters.
Different Kinds of Inventory You Can Liquidate
The process of liquidating inventory isn’t limited to overstock goods. There are different types of stock that your business may be holding on to that may be better off liquidatedThese include the following:
Dead inventory, also known as obsolete inventory, refers to goods that have remained unsold for more than 180 days. If you’re looking to liquidate this kind of inventory, one of the first things you need to ensure is that your items are not perishable.
Dead stock is usually items that have incurred damage or have little to no demand. However, liquidation companies often have a diverse network of clientele, some of which may be looking to acquire damaged goods in order to upcycle, recycle, or repair these merchandise.
Liquidating these items and selling them for a cheaper price coupled with unique marketing initiatives may help get these items up and out of your warehouse.
Aged inventory refers to merchandise that is unmoving but too young to be considered dead or obsolete. Items that have been in the warehouse anywhere between 60 or 90 days commonly fall under this category. This type of inventory has all the cons of excess and dead inventory, making aged items a great inclusion in your list of ‘to liquidate’ stocks.
It’s inevitable for your product-oriented business to see one, two, or a couple of hundred returned items over its lifetime. When customers order products, they may end up returning them to the seller due to reasons ranging from the item being damaged, defective, or incorrectly delivered. Even if the returned item is in pristine condition, this product has already been removed from its original packaging and decreased in value, making it difficult to sell. Through liquidation, these returned products can recover value with the help of a liquidation partner.
Benefits of liquidating your inventory
Liquidating your assets with the help of a liquidation partner eases the burden of figuring out what to do with your unmoving items.
As mentioned, excess, aged, and returned items take up a significant amount of warehouse space. Liquidation can help free up your storage space, release your tied up capital, and lower the excessive holding costs these items represent.
Furthermore, liquidation can help you recover a portion of the revenue your merchandise originally forecasted to make. However, this process involves specific measures to ensure your items will be sold in a strategic manner. Liquidation partners can help you with this by assisting with the evaluation of your inventory’s value, pricing them accordingly, selling them through several distribution channels and partners, and of course, recovering value for your business.
If your business is serious about finding a liquidation partner that not only recovers value from your items but also puts our planet first, considers liquidating with Humble Sustainability.
Meet your new liquidation partner, Humble Sustainability
The often overlooked disadvantage of harboring overstock, obsolete, aged, or returned inventory is its harmful impact on our planet.
It’s important to remember that aside from the monetary value spent on purchasing these unmoving items, resources such as energy, water, and raw materials were utilized to produce them. Add to that the carbon emissions emitted by most factories and the resources used to transport them from the manufacturer to the warehouse. In addition, some companies, when faced with a lack of access to liquidation solutions, dispose of their unsold merchandise in landfills or incinerate them.
This is the impetus of Humble Sustainability, a liquidation company in the Philippines with a purpose: solve the interlinked problem of businesses losing revenue over their unsold inventory and our planet suffering caused by the disposal of functional items through its liquidation service.
Through an environmentally-friendly, tech-driven, and customer-centric approach, Humble helps companies recover value from their products that would have otherwise ended up as waste in landfills. The items they liquidate range from returned products, excess stocks, items with damaged packaging, aging inventory, and so much more.
Liquidate your overstock items with Humble Sustainability today
Make your returns and excess inventory the hero or buy sustainably-sourced items in bulk. Start your business’ sustainable journey with Humble Sustainability today!
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