Clearing out your (very) seasonal inventory
December 13, 2018
Many retailers tend to hoard their not-so-popular inventory with some desperate hope that they’ll see a return on their investment. The holidays make it easy to avoid this mindset because once the holiday season is up, no one wants anything to do with it. Consumers are moving on, and you should too.
Bail on those unsold Christmas sweaters, decorations, and yearly trends. It’s time to let go. Markdowns, clearance, and donations can all work in your favor.
It’s not necessary to rid your business of all seasonal merchandise. Just the very Christmasy items that will otherwise remain in your backroom indefinitely.
Of course, it’s not necessary to rid your business of all seasonal merchandise. Just the very Christmasy items that will otherwise remain in your backroom indefinitely. The ghosts of Christmases past. Some items can be stored away for the following year, but not everyone has the extra space for outdated inventory.
Before you panic and forfeit any chance for profit by springing a ridiculous sale into the market (although customers might appreciate it), stay smart. Know your game plan before the season starts. Not during, and especially not after.
Retail inventory management
Planning can help you avoid over or under stocking during the holiday season and will therefore save you time, money, and effort at the end of the quarter.
Retailers know that inventory management is a gamble. If you don’t have enough product, you miss out on sales. But if you over stock and sales fall through, you’ll have to deal with your excess inventory.
Forecasting prepares you for the best and worst. If you’ve already looked into your past sales, you probably planned accordingly and are feeling pretty confident with your projections. But what if you just don’t meet your mark for blow up Santas and snow globes?
There are many software platforms to help you with your retail inventory management. Keep track of your seasonal stock in order to gauge what you need to do to clear house when the time comes.
Markdowns & inventory clearance sale
Markdowns. They hurt, but they’re better than you burning.
You should be gauging your holiday sales performance throughout the season. Don’t wait to the end to acknowledge that you are being buried in soon-to-be outdated stock. Get rid of your stock with an inventory clearance sale approaching the end of the selling season. Have a well-planned timeline with set goals to determine your expected high selling points, as well as your clearance deadlines.
There may be a few customers who are thinking ahead to next year’s decorating and festivities. These customers are always looking for a deal and get excited about covering their decoration needs for the next year, if not for the current one.
Don’t wait to the end to acknowledge that you are being buried in soon-to-be outdated stock. Get rid of your stock with an inventory clearance sale approaching the end of the selling season.
But mostly, once the season is out of sight, it’s out of mind. At some point, people start looking forward to sunny, sandy, windows down weather. If you show them a discounted snow shovel at this point, you’re bringing up past traumas. Snowy-demon-men.
Last minute shoppers, those coming late to the game can really make up for slow or underwhelming sales. Coming up to the holiday climax (Christmas Eve and Boxing Day), you’ll have a lot of competition. But with seas of shoppers and excess stock, you’ll be more motivated to markdown and sell, rather than hold onto soon-to-be obsolete materials.
Ugly Christmas sweater parties are more and more common. The necessity for warm clothing is more important. The demand for each gives retailers a layered leg up on fashion sales. Until the snow melts, you won’t have to worry too much about clearing out your winter clothes supply. And those ugly Christmas sweaters only get more valuable with time.
If Christmas proves anything, it’s that people really like unwrapping things. Surprises, suspense, mystery, disappointment. It’s all in the bundle. While customers are bundling up for the cold weather, bundle a variety of top and low sellers for a set price. This will give you a creative and unique spin on clearance.
Whether baskets or boxes, decorate your bundle and advertise for a “bundle” of savings. A lot of retail relies on the packaging. Get artsy and festive with your Christmas bundles to steal customers’ attention.
Include your hard workers in the benefits of overstock. With desperation comes giving. Employees will be pressured to sell seasonal items before the close of the year. They should at least get a chance to claim some sweet deals on holiday items.
Give them first call for discounted items. They’ll feel special and appreciated, and maybe even more inclined to buy, with such a rare opportunity.
Donate excess inventory
Sometimes you have to give to get a little. Help yourself by helping other people. There’s no point in taking up space for relevant inventory.
Many companies choose to “destroy in-field,” breaking and tossing merchandise that could otherwise be donated rather than taking up space in a landfill.
Plus, the government gives incentives to companies that donate excess inventory. As long as the quantity of the donation is reasonable and fits within the organization’s mission, you can get a tax deduction on excess inventory from the IRS.
What about for larger quantities that charities may see to be an “unreasonable” amount of excess stock? For that, there are liquidators. Probably the best way to see a return on (some of) your product, is liquidation. Many companies rely on discounted bulk adoptions of merchandise. They thrive on the scraps of seasons past. Seasonality isn’t such a huge factor for liquidators, and in fact, it’s almost expected that there will be out-of-season materials available year round at a liquidation site.
Whatever the season and reason, we hope you’re profitable. Happy selling.