Are you destined to make a loss on all of your dead stock this year, or could our advice and retail management software help?
It is inevitable in any merchant business that, while there will be many products that sell remarkably well, there is likely to be at least some stock that rarely beeps its merry way through your electronic point of sale system. Although this is quite common, this leftover stock can cost you far more than it’s worth by taking up unnecessary space in your warehouse or on your shop floor, having an impact upon overall cash flow and freezing earnings that could otherwise be spent on products you know will actually sell.
So, what can you do about it? You certainly don’t want to go chucking it away and losing out on even more money, but at the same time, you don’t want to immediately drop the price and sell it for practically nothing, either. Here are some tips to consider when contemplating what is best to do...
Do your research
Before you go about instantly lowering the price or taking the item off the shelf altogether, you should assess why the product might not be selling. Are people viewing your products on the shelf and then deciding they don’t want or like it, or simply not viewing it at all? Has it been replaced by an upgraded model? Do competing products do a better job for a better price? Is it a particularly seasonal product? Knowing why people are not buying a particular product will help you to make the right choices to redress the balance in your favour.
Consider your presentation
How are these particular troublesome products presented in your shop? It may be that they are hidden at the back of the shop, in poor light or the wrong section. If people can’t find what they’re looking for, there is a chance that they may instead take their search for particular products elsewhere. Perhaps other products surrounding them might be overshadowing them or better catching a customer’s eye. Compare the product’s presentation with that of a product that is selling well. What differences are there? As an initial test, you could try moving the product to a different section in your store or closer to the entrance. Using information from your stock management software, you could even position it alongside related top sellers.
Promote, promote, promote!
There’s not much point in just leaving the product be and just hoping sales might start to pick up. If you’ve improved the presentation, may as well let people know about it. The product that is not selling as well as others should have the opportunity to take priority for a while. Use your shop window to promote the fact you stock particular inventory items, and consider using your retail software to send an email to customers who have bought related products (using information captured at point of sale) to let them know about your stock.
What are your competitors charging?
It may be that the reason your product is not selling very well is that your customers are finding it elsewhere at a better price. If this is the case, you should see an improvement in sales by lowering your cost to match or better their levels and promoting the fact that you have done so. If there really is no way that you can afford to drop your prices (perhaps because you are a physical store competing with online retailers), emphasise what else your customers will receive by buying from you instead of somewhere else. Do you offer a good returns policy? Do you have a loyalty scheme in place? Perhaps giving free in-store advice will give people a reason to visit you and pick up your hard-to-shift products at the same time.
Sell with other products
If your product still isn’t selling well, you could always sell it as an extra with another product that is already selling well. When your customers go to buy one product, offer them the chance to buy the difficult-to-shift product for only a little extra money. You might find that your customers are likely to purchase the extra item as they will feel like they are getting a good deal, even if they didn’t want the extra product in the first place!
These are just a few ideas of how you might be able to shift your slow-moving stock; if your retail management software reveals that the product in questions still isn’t budging, it might be time to consider either selling back to your supplier, discounting the product to another wholesale company, or even giving it away as a freebie with other purchases. These may all seem like drastic procedures, but remember that you will always lose more on not selling the product than you will on selling it for less.
When it comes to ordering more stock, try to ensure you don’t repeat the same errors again. Integrity Trader can help you by providing inventory management software that ensures you’ll never over-order, and by providing historic sales reports with ease. Take a look at the website or contact one of the team for more information on how sector-specific software for merchants can benefit both you and your business.
Trader is an easy to use electronic point of sale system designed for the unique requirements of building, plumbing and timber merchants, hardware and DIY stores in the UK and Ireland.
Our team are ready to help with any queries or arrange a demo for you.