What to do when stock level is high

Via investopedia.com

Having an excess of stock is one of the most serious issues of both large and small businesses today, which causes many negative impacts on the money streams and profits, including running out of cash.

Avoiding this situation is crucial for all kinds of stock, especially seasonal stock, such as holiday products, clothing, fruits, etc. Because of short shelf life, these sorts of items are regularly difficult to sell once, and as they get older, they will be no longer seasonable or fashionable. Additionally, non-moving inventory occupies space, take up retailer’s time and effort to transport, and ties up money.

This article is going to take you go through helpful techniques to help you answer the question: What to do when stock level is high? Especially retailers have too much stock left after Xmas.

Why does Excessive Stock Happen?

High level of stock is caused by many reasons, but all of them are related to the deficiency of stock management and demand tracking. If you choose the wrong kind of products due to incorrect tracking current demand, you could get trouble to make the high number of sales.

In particular, if your anticipation for future demand is too HIGH, you could face with abundant income into unneeded stock. On the other hand, if your anticipation for future demand is too LOW, you might lack stock to deliver, and thus, you miss the chance of selling your products.

What’re Disadvantages of Excessive Stock?

  • Increase Carrying Cost: Excessive stock ties up the business fund which is the resource that your business can utilize in other areas, for example, marketing research.
  • Decrease Storage Space: As you have too much stock “stagnant” in your warehouse, you will face a very big problem; that is the lack of space to store new stock.
  • Increase Storage Cost: Some retailers require maintenance criteria to preserve the quality of the material, including temperature or humidity control, and these requirements contribute to boosting the cost of warehousing.
  • Quality Degradation: Sometimes, we cannot determine the specifications of our customers. Even though we can predict the future demand properly, we might don’t know when and how our customers modify their specifications or require different materials. Your stock level stays high; now it’s much higher!

What to Do when Stock Level is High

Mark Down

The best way to handle excessive stock is, obviously, selling it as much as you can. To do that, running a special sale is a great idea. Since we all love a sale, there is no better approach to get your stock out of the door. And the truth is that a significant number of business experiences “stock deals” promotion to ameliorate the situation. Because unmarketable stock cannot generate the cash flow to take care of the expense of the space they consume, it would better to decrease the price to move it.

However, some businesses don’t take an interest in following the marking-down street because they think it will just lose them cash. This is comprehensible, but there is a technique to stay away from this. I’m talking about the 4 P’s of marketing: Product, Place, Price, and Promotion. It’s recommended to take a close look at these components prior to starting a sale. Only driving a sale when all these components are in place.

What To Do When Stock Level Is High

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Moreover, keep in mind that you shouldn’t run the promotion too long. That’s because your clients could get used to it, and consequently, simply wait for you to go discounted and turn a blind eye to your products. Also, be careful with too many deep discounts. They could cause underestimated impacts on your business brand’s image, especially in case you’re a higher-end retailer.


Cross-Merchandising is also called secondary product placement. It’s a method of marketing, in which, your business will display the products from different categories on the same shelf or aisle. By exhibiting various products at the same place and making them interact with each other, you can link the related products as well as save a lot of time spending on transporting to other shelves.

But the biggest benefit of Cross-Merchandising is not just that. When you combine cross-merchandising with a discount, your customers will not only explore new markets easier but also can value the discount and decide to buy your products. As a result, it’s an excellent way to get your products out the door.

Be creative when gathering numerous items together. In the spirit of the Christmas season or any holiday, you can offer your loyal customers with a sale in case they purchase in mass. It’s a financially saving approach to attract more consumers.

Free Shipping

Rewarding your buyers is never out of date, and free shipping is one of the most outstanding forms of rewarding. It’s not by chance that free shipping models, such as Amazon or Alibaba, have taken the world by storm. These are just a few examples. For your business, you don’t need to apply this kind of rewarding all year round, but it will be a savior as you try out to eliminate excessive stock.

There are many studies proven the power of free shipping. For examples:

  • According to a study conducted by UPS in 214, over 80 % of consumers tend to make purchases from websites that delivering free shipping. This makes free shipping keeps going to be the most favorite offer when checking out online.
  • According to Forrester Research, 90% of customers are enticed to spend more online with retailers offering free shipping. On the other hand, 78% of customers feel discouraged from shipping costs.
What To Do When Stock Level Is High

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It’s important for businesses to know how to reduce the cost of shipping. In other words, how to pay less money for third-party transporting services. Here are a few tips:

  • Use Fulfillment Services: Company can distribute popular products via fulfillment suppliers to decrease the distance of transport and thus significantly diminish the cost of shipping.
  • Restrict Free Delivering Offers: Although you desire to provide free shipping offer to all of your customers, that offer doesn’t need to be the same. If your warehouse is located in Texas, you may provide free shipping with no minimum purchase for intrastate requests. While free shipping to adjacent states (like New Mexico or Oklahoma) requires a minimum purchase, more distant states (like Colorado) accept a moderately higher minimum purchase.
  • Minimize Packaging: In the age of worldwide dimensional weight shipping charges, diminishing package size can lessen the shipping fee.
  • Pick Proper Carriers and Service Levels: Attempt to find the best combination of carrier and service level for every shipment. Regional Rate Boxes are cost-saving for short-distance shipping. On the other hand, FedEx ground shipping may cost less for cross-country deliveries.


According to Business Insider, an estimated $3.4 trillion worth of stock were disposed of in online shopping baskets in 2016. What you have to do is to find the way to keep your clients more engaged by utilizing more mediums to advertise your products and skyrocket the conversion rate.

According to infographic retargeting advertising statistics by digitalinformationworld.com, retargeting can change the business’s income in many different ways:

  • It can prompt to 147% higher conversion rates over time in certain industries.
  • With retargeting, 26% of customers returning and finishing the check-out process, while without retargeting, the figure for this measurement is only 8%.
  • 70% of retargeted visitors by ads are more likely to convert on e-commerce websites.
  • The CTR for retargeted ads is ten times higher than of the display ads.

Retargeting is similarly as prone to work in the new year as in the Christmas season. As opposed to giving your site a chance to grieve in the doldrums of individuals’ forgetfulness, offer them the retargeting attraction which could pull them back and constrain them to spend money.

Remember that never stop seeking for fresh and effective methods to target new buyers and retarget loyal customers, especially if you only run an e-commercial business. There are a variety of retargeting applications and services on the market, but social networks, such as Facebook or YouTube, are two of the most effective and popular choices for companies and retailers. For example, Facebook Custom Audience is what you can take advantage to reach new customers with ads displayed on that platform.

Eliminate Obsolete or Surplus Stock

It’s essential to have the capacity to not only spot obsolete stock for evacuation but also apply the best methods for doing so. While some stock chiefs might be hesitant to discard stock at an extensive loss, the long-term issue of clutching pointless stock far outweighs the short-term drawback of disposing of it quickly.

There are various roads available for businesses to discard undesirable stock, but first, it ought to be classified as stocks that can be utilized in the association. It’s stock that can be sold off and un-refundable that should be thrown away.

Consulting to return surplus stock to the distributors is the principal road that should be sought after. Offering special discount is another approach to start meeting requests and moving overabundance stock. By this, selling products with a sale in universal markets will permit you to move undesirable stock and still get a part of the merchandise’s esteem back.

Donate to a Charity

Give it to philanthropy. At the point when all of the above assistances are failed. Why don’t you offer it to a charity? Maybe, your products were truly expected for other individuals who really need your assistance. And what about the personal interest? Your business could receive invaluable goodwill from the community. Is that an excellent way to advertise your brand?

How to Prevent Excessive Inventory

We all know that “Prevention is better than cure.” But how to prevent the stock from excessing. Here are some tips that businesses should follow:

  • Stock Management: Utilize the best possible tools and strategies to break down which products to buy at what price, quantity and time to generate the highest profits. Also, figure out the lead times time and safety inventory.
  • Stock Control: Utilize the best possible tools and strategies to precisely check and control products after you put them into the warehouse. Set the maximum and minimum level of stock that will be preserved in the warehouse.
  • Prediction: Define the proper level of stock by tracking current demand and make anticipation for future demand. There are many factors affecting the amount of stock you have to invest. Some of them include what kind of business you are, how big the demand of your customers, how long your supply chain, what types of products, and so on.
  • Purchasing: Utilize the best possible tools and strategies to precisely figure out and make a comparison of suppliers to determine who gives you the lowest cost ownership.


Excessive stock causes too many negative impacts on your cash flow and business performance. In today’s economic climate, businesses should keep up their stock as lean as possible. If businesses, unfortunately, fall into the trouble of excessive stock and don’t know what to do when stock level is high, especially retailers have too much stock left after Xmas, finding effective methods to get rid of excessive stock needed to be taken into account as soon as possible.

Also, keep in mind that “Prevention is better than cure.” Instead of struggling around to deal with excess that was already happened, it’s better to avoid it in the first place by determining the root causes of excess and revise them with proper techniques and tools as we already showed you.

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