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How do I liquidate dead stocks?

I own an online store, and I have a lot of dead stocks in my warehouse. What is the best way to liquidate these stocks without resulting in huge losses?

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Serge, the first thing that you need to do is to analyze why you have dead stock in the first place. With today's reliable software many managers tend to think that inventory operates on autopilot. Managing inventory has indeed been greatly facilitated by new technology, but it still requires timely reviews that include evaluation of vendors. It is also important to understand the basic principles of inventory control and not to rely entirely on software-driven data.

Vendors are key cogs in an efficient supply chain. Their reliability must be analyzed by the purchasing manager at least once a year. When the review is complete the vendors should be rated on a % of on-time delivery (reliability), overall quality, technical support, and customer service response. This rating establishes the weight that should be applied to the Reorder Point (ROP) to determine the safety stock. Safety levels can be based on multiples of the ROP.

Dealing with your dead stock, there are several avenues for you to take: 1. A deep-discount sale of the designated inventory featured on your website or e-mail campaign 2. Donation of the inventory to a charity who will provide you with a tax receipt 3. Bulk sale to a competitor or supply chain intermediary who may still be carrying your obsolete items 4. Direct sale to the public from a brick and mortar outlet that you are connected to. You can also rent out some space for this event. 5. The last resort is flea market participants who will cherry-pick the items and offer very low prices.

2

Deadstock means working capital that could be put to use tied down and you have made the first right step in acknowledging you have dead stock. By you mentioning huge losses, I am presuming you expect to sell or dispose them at under cost. An ideal scenario is you list everything as one wholesale lot and try to recoup as much as possible. If there is interest in what you are trying to liquidate, this could often be the fastest way to cash up.

You will have to start with taking an inventory of all the stock you want to liquidate or hire a student or a casual to do this if this would be beyond you. Once this has been done segregate into what you think people would buy directly from you at a much better than retail but better than wholesale price. List them on marketplaces like Ebay or a similar trading post if you think there will be takers. This would of course mean there is a lot more effort involved in listing, writing descriptions, etc.

Lastly with the remaining stock post the inventory list with details of condition, etc and make one bulk listing for someone who may be interested in purchasing it off you- to onsell. You may find someone could sell it at a flea or farmers market and still double what they buy it from you at.

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