by Mark Tomalonis
Do you have anything in stock that has been there for more than a year? Two years? Do your inventoried items have Birthdays??? Before an inventoried item has its first Birthday, consider these strategies to get rid of it and recover your investment:
- Identify Unwanted Inventory Every Month
The longer an unwanted item sits in stock, the harder it is to get rid of it. Have a process or discipline that identifies unwanted inventory every month. Doing so will make it much easier to take the suggested actions below. Identifying unwanted inventory every month should be someone’s assigned responsibility.
- Sell It Locally
Who used to buy this item? Try to sell it to them. Reduce the price if you have to. Sell it at a loss, if just to recover most of your investment.
- Sell It via WarehouseTWO
Expand the available marketplace for your unwanted inventory, by making it available to peer distributors. The item may have no demand in your local territory. But it might, somewhere else in the world. Formalized inventory-sharing at WarehouseTWO can expose your inventory to thousands of end-customers, through dozens of peer distributors. Attend our training webinar titled “How to Upload Inventory Data” to learn how to grow the demand for your items at WarehouseTWO. Click here to register for this webinar, or for any of our free training webinars.
- Return It
Take advantage of every annual/periodic inventory exchange offered by your manufacturers. Returning an item for credit (or in exchange for a like-value purchase of other items) is an easy way to get rid of unwanted inventory. Make sure that you have a formal process and schedule to take advantage of such policies. Managing periodic returns should be someone’s assigned responsibility. Be aware of any limitations to what can be returned/exchanged, such as items whose warranties have expired.
- Substitute It
If your unwanted item can be used in place of an active item, create a process or discipline whereby your customer service representatives offer up, at an attractive price, an unwanted item whenever a customer asks about a similar, active item. WarehouseTWO’s Related Items functionality lets your unwanted items appear in SEARCH results when another distributor searches for a similar, more popular item at WarehouseTWO. Click here to learn more about this powerful feature.
- Convert It
Disassemble, reassemble or modify an unwanted item to convert it into a more active item. For many industrial products, options can be removed or replaced, and components (such as trim or seals) can be changed.
- Sell It to a Surplus Dealer
If you can gain a greater financial benefit than from simply writing it off, consider selling your unwanted items to a surplus dealer who caters to your industry.
- Donate It
Donating inventory might have the same financial effect as writing it off and disposing of it, but a donation benefits a non-profit organization. One of our favorite organizations is FIRST, the robotics competition organization for primary and secondary school students. This organization is known to accept fluid power and industrial automation products, to be used in their competitions.
- Write It Off
The only guaranteed way to turn excess inventory into cash is to throw it away and write it off. For those of you in the U. S., it’s tax season. How much inventory did you write off for 2011? Did you take all of the above actions prior to writing it off? What will you do differently in 2012?
Tribute, Inc. has partnered with WarehouseTWO to offer customers a streamlined inventory sharing process. WarehouseTWO is also an inventory sharing network for the Eaton Hydraulics team and Parker Fluid Connector, Hydraulic & Instrumentation Groups. If you’re going to the NAHAD Annual Meeting in Las Vegas, you can find Tribute at Booth #27 and WarehouseTWO at Booth #85.