I'm Downsizing My Warehouse. What Do I Need To Do First?

Warehouse space is valuable real estate, both physically and financially. When it gets choked with old inventory, closeouts, and overstock, it can suffocate your business's cash flow and efficiency. Fear not, clutter conqueror! This article equips you with the strategies and tactics to turn that stagnant excess inventory into cold, hard cash and reclaim your warehouse space

Step 1: Identify the Enemy – Analyzing Your Overstock Inventory Landscape

Before you unleash the liquidation cavalry, you need to scout the battlefield. Conduct a thorough inventory audit, categorizing your unwanted stock, determining which products you can liquidate and make room in the warehouse.

• Closeouts: Discontinued products with limited lifespans. These are overstock products sitting in the back of your warehouse that have a limited time to sell. Dated inventory, or fashion inventory that has a limited life. You won't be able to sell these products forever, and if they sit too long you run the risk of them turning into dead stock that you cannot sell anymore. Rule of thumb: don't let closeouts, overstock products, abandoned inventory and discontinued merchandise sit too long before you liquidate.
• Overstock: Products exceeding projected demand. These are products that should be phased out as closeouts and excess inventory. Perhaps you only had a limited amount of customers who bought them, and now they are collecting dust in the back of your warehouse. Reduce price, contact inventory liquidators and closeout buyers and get rid of it.
• Excess Inventory: Redundant products occupying unnecessary space. This tends to be older inventory that you no longer have a home for. Closeouts like these tend to get lost in the shuffle and before you know it they are taking up valuable warehouse space that could be used for newer products. If you are looking for a way to liquidate excess inventory, try a simple Google search using these terms: closeouts, selling excess inventory, liquidating overstock products, selling abandoned inventory, shutting down warehouse, going out of business, closing down, downsizing warehouse, inventory liquidation sale, closeout brokers.
• Discontinued Items: Products no longer offered in your usual lineup. This is pretty much dead inventory you can't do anything with. This type of product should be liquidated at a reduced price to closeout companies that specialize in buying overstock inventory.
• Slow Movers: Products languishing on shelves, gathering dust. Slow movers are just closeout products not selling as fast as they used to. If you continue working on these products you will probably be able to find new markets at regular prices. If this doesn't work, contact inventory liquidators, reduce your price and move the old stock out of your warehouse.

Step 2: Craft a Winning Sales Strategy – Choosing the Right Weapon

Once you've identified your targets, choose the most effective method of dispatching them:

• Clearance Sales: Deeply discounted sales in-store and online, ideal for generating quick cash flow. Most consumers love a bargain, so if you offer them your closeouts, overstock inventory and excess stock at a discount, they will probably bite.
• Flash Sales: Time-limited, high-intensity sales creating a sense of urgency and attracting bargain hunters. Flash sales are a good way to offer one-time closeouts and special deals on any excess inventory you want to clear from the warehouse. If you are keen to clear stock, just reduce price and try a flash sale.
• Bundle Closeout Products: Combine slow movers with popular products, making them more appealing. This is an effective way to liquidate inventory that can easily be bundles together. A dog bone and a dog bed, a fry pan and a pair of tongs, a screwdriver and a roll of electrical tape, etc. Putting similar closeouts together can help liquidate excess inventory you were otherwise unable to find closeout buyers for. Give it a try and you may be surprised.
• Liquidation Sales: Partner with inventory liquidators who buy your inventory bulk at a lower price, perfect for quick clearance. These are companies that specialize in buying closeouts, abandoned inventory, discontinued products, overstock inventory and abandoned stock.
• Online Marketplaces: Utilize platforms like eBay and Amazon to reach a wider audience.

Step 3: Pricing Perfection – Striking the Value Balance

When liquidating inventory, pricing is a delicate dance between maximizing profit and driving sales. Consider these factors. Whether you are selling slow-moving products or getting rid of dead stock sitting in the warehouse, finding the right closeout buyer is essential.

• Original Cost: Avoid selling at a loss, but be willing to take a hit on slow movers. When it comes to closeouts and overstock products you are likely going to take a loss. Closeout buyers can only make a profit if they buy and sell below regular import cost.
• Market Value: Research similar products to gauge competitive pricing. Overstock inventory buyers are pretty smart and they know their market. You will have a tough time selling closeouts if you don't price them right. Overpriced goods will sit in the warehouse taking up valuable warehouse space that could be used for other products. If you are keen to clear stock from your U.S. warehouse be sure to work with reliable closeout buyers, and price your liquidation inventory accordingly.
• Condition: Adjust prices based on product wear and tear. Most closeout buyers will not consider buying used merchandise. They are looking for closeouts and excess inventory of new goods, and often will only buy name brand closeouts. Closeout pet products and closeout housewares are among some of the more popular categories of excess inventory.
• Demand: Price high-demand items slightly higher, discount slow movers aggressively.

Step 4: Marketing Magnification – Spreading the Word About Your Bounty

Don't let your clearance sale be a silent whisper. Amplify your message through:

• Social Media: Post eye-catching visuals and compelling offers. Facebook, Instagram and other social marketplaces are great options for promoting closeouts, overstock products, inventory liquidations, warehouse sales and abandoned inventory sales.
• Email Marketing: Target loyal customers with exclusive deals and early access. If you can email all of your closeouts and discontinued products to customers this is great. But email only goes so far and you may also have to pick up the phone. It is essential your customers know when you desperately need warehouse space and are offering closeouts to make room by getting rid of unwanted inventory and overstock products.
• Website Updates: Prominently display sale banners and product listings. Keep your website up to date with all of your specials, closeouts, excess inventory deals and discontinued products.
• In-Store Signage: Attract foot traffic with vibrant signage and displays. If you have a retail store, signage is key to getting rid of old and unwanted merchandise. Show your customers all of your closeouts, discontinued products and overstock inventory. Give them an opportunity to buy at a discount and watch what happens.

Step 5: Logistics Logistics Logistics – Streamlining the Selling Process

Smooth operations are key to maximizing your sale's success. Here are some logistical tips:

• Inventory Management: Ensure accurate stock levels to avoid overselling. When selling closeouts and overstock inventory these goods can move very quickly. Be sure you have good inventory management controls so you don't oversell.
• Order Fulfillment: Streamline picking, packing, and shipping processes. Typically, closeout buyers want to pickup their orders quickly and get them out of the warehouse. So if you have orders for closeouts, excess inventory, overstock products, etc, pull these orders quickly and be ready to ship fast. The good news is this immediately makes room in your warehouse for new products.
• Customer Service: Be prepared for increased inquiries and returns. Normally, closeouts and abandoned inventory are sold on a “no return” basis. If you are clearing stock from your warehouse below cost, you don't want to take this liquidation inventory back.

Merchandise USA is an inventory liquidator in business more than 40 years. We are a reliable and professional closeout buyer specializing in buying closeout housewares, closeout pet products and liquidation inventory of all kinds. We buy excess inventory of lawn and garden products, overstock toys and games, sporting goods, etc. If you are not familiar with the closeout process, we can help you. If you are shutting down your business, downsizing warehouses or completely closing your warehouse we can help you with the liquidation process.