How Businesses Handle Surplus Inventory

One of the things that retail store customers fail to appreciate is that their favorite retail store may be having trouble dealing with excess inventories. In an ideal scenario, stores would rather undersell to a few customers than have so many items in stock that end up being recycled or worse, incinerated without a second thought. Fortunately, it doesn’t always mean that surplus items immediately go to disposal. There are a lot of ways that stores deal with surplus items, which is a good thing since it ultimately, reduces waste.

 

A common method of getting rid of surplus items is to sell them bundled with the same item or a different but related one. The buy one and get one free model is quite common and is undoubtedly appealing to customers. While 50% discount is in some way similar to the previously mentioned bundle, the discounted option essentially means fewer items are sold per customer. Since the point is to get rid of surplus items, buy one and get one free makes more sense.

 

If slashing off 50% from the overall cost of the item, even for the sake of breaking even for its base cost isn’t probable, then stores can go for discounts that can do just that, break even. Still, in the grand scheme of things, it may sometimes be better to cut the store’s losses and sell the item lower than its base acquisition cost instead of throwing it out altogether. The approach to this is different depending on the store’s business model. Some stores would refuse to go so low in terms of discount because it subconsciously tells customers that the discount rate is practically the store’s profit margin when the item isn’t on sale. Another great way of getting rid of surplus is to go to wholesale liquidators.

 

These businesses have the distinct model wherein they buy surplus items from stores and then sell them to buyers who are interested to buy said items in bulk. These businesses are known to keep general merchandise stores and local specialty stores with sufficient inventory for their niche market. This is basically where local office and school supply stores order discount office supplies.

However, before taking this option in getting rid of surplus items, it’s practically necessary to find reviews on the business as well as check their website for further information. There’s bound to be more than one option, and it’s always a good idea to check out which of them offers the most reasonable price.