Is Your Business Hoarding Too Much Stock?

One of the issues that regularly pops up in the world of business is storage capacity. Whether it’s an office cupboard full of junk or a store that can’t sell off its stock quick enough, we all end up hoarding things sooner or later. It’s a business practice that usually leads to disaster. The ability to manage your inventory properly is a key management skill that every business needs. Without it, you’ll end up with little space in your business, high maintenance fees for storage, and a lot of obsolete stock that you just can’t shift.

Every time you have to sell something at a discounted price or, worse, throw it out because no one wants it, you’re losing valuable money that could be spent elsewhere. To help you remedy the issue of hoarding, here are a couple of tips that will declutter your business, make you more profit, and ultimately lead to a more successful business.

Consider off-site storage

If you sell products from your office, then you’ve probably thought about using industrial units to store all of your stock or a warehouse instead of keeping them at your office. Off-site storage is usually cheap and plentiful, but the problem comes when you consider the distance. However, using a storage unit has a lot of benefits. For starters, you get a ridiculous amount of space to store all of your goods and it’s much easier to organise when you have a blank space to use. It’s also cheaper than renting another office, refurbishing your workplace or paying an employee overtime just to sort and organise your inventory.

Items that expire

If you specialise in selling perishable products, then the worst thing to do is buy too much stock only to have it not sell and end up in a bin because they are no longer usable. If you are selling perishable items, make sure they are fresh and last at least a couple of days. Keep in mind that you can’t sell these items if there is no demand, so try to make an accurate forecast when you are refilling stock so that you don’t go over your predictions. There is no way to mitigate losses on perishable items, so do your best to avoid them completely. It’s better to be out of stock on an item than see it go to waste by being thrown into a bin.

Outdated items

In addition to perishable items, it’s never a good idea to overstock on items that are trendy. For instance, you could purchase a lot of stock on a sought-after holiday item. However, other nearby stores are probably doing the same thing and, as a result, you might not sell as many products as you had hoped. It’s always important not to overestimate trends so that you don’t end up with a lot of obsolete stock at the end of the rush. As with perishable items, it’s always better to end the day with an empty stockroom as opposed to a stockroom with products you simply can’t sell.

Avoiding discounts

One of the negative side effects of hoarding too much stock is that in order to get rid of it, you need to have discounts and sales. If you find yourself doing this on a regular basis, then you need to step back for a moment and realise that you have far too much stock. Discounts should rarely ever happen and you should always aim to sell for the retail price unless it’s a holiday period such as Black Friday. It’s fine to order more stock when a special occasion is coming up, but otherwise, you should avoid the need to discount your products in order to move stock.

Monitor consumer demand and trends

Lastly, the best way to take control of your stock is to actively monitor consumer demand and trends. Let’s say you operate a video game store and there is a hot new game being released next month. You can open up pre-orders at your store so you know the minimum number of copies you have to order. Next, take a look at early reviews or previews of the game online so you can get a good idea of how popular it is. If it has received lots of great reviews and scores from various publications, then it’s probably going to a popular title, meaning you can afford to order a few extra copies for people that haven’t pre-ordered. In short, always monitor trends, do research on products before stocking them, and try to gauge interest with pre-orders before you actually order your stock.

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