The Closeout Process: A Deep Dive into Offloading Excess Inventory

Excess inventory, whether it's closeouts, overstock, abandoned goods, or simply unwanted merchandise, presents a significant challenge for businesses. It ties up much needed capital, occupies valuable warehouse space, and increases the risk of damage and obsolescence. The "closeout process" encompasses the liquidation strategies and tactics used to effectively offload this excess inventory, minimizing losses and maximizing returns.

1. Inventory Assessment & Categorization:

• Accurate Inventory Audit: The first step is a thorough inventory audit to identify and categorize all excess stock and why you are wanting to get it off your hands.
  • Slow-movers: Items with significantly lower sales velocity than historical averages. These are products you don’t need anymore, because they are no longer selling and not active in your line. Selling off old inventory is a necessary part of running a successful business.

• Obsolete: Products no longer in demand due to technological advancements, changing consumer preferences, or market shifts. You will likely never miss having these products, so disposing of them shouldn’t hurt your bottom line. Whether they are slow-selling or not selling anymore at all, should be your #1 priority.

• Closeouts: Discontinued products, liquidation items or those being replaced by newer models. Whether you have new products arriving to replace old styles, or you have simply discontinued inventory that won’t be replaced, it’s time to move on.

• Damaged/Defective: Items unusable or requiring significant repairs.
• Abandoned: Inventory that has been forgotten or neglected, potentially damaged or outdated. This is often the case when a tenant leaves a warehouse in a hurry; they might leave behind old inventory they no longer need or want. The landlord can sell off this abandoned inventory to inventory liquidators and other closeout buyers, in an attempt to recoup some of the costs owed by the tenant. It’s unlikely that a liquidator will be able to help you recover all of your costs, but getting back something is better than nothing.

• Categorization:
  • A-List: High-demand, fast-moving items. These are good selling products, so probably no need to offload this inventory or discount it as closeouts.

• B-List: Moderate demand, steady sellers. These may be selling slowly, so perhaps it is aged inventory you may want to consider disposing of and moving out of the warehouse.

• C-List: Low-demand, slow-moving or obsolete items. This category is the primary focus of the closeout process. These are the unwanted products sitting in your warehouse taking up valuable space that could be used for other products. Whether you have stockpiles of inventory due to canceled orders, discontinued products, closeouts, or simply excess inventory that has accumulated over the years, if you are keen to clear out your warehouse you might consider contacting inventory liquidators and overstock buyers.

2. Pricing & Discount Strategies:

• Gradual Reductions: Start with small, incremental discounts to gauge customer response. Gradually increase discounts over time. Liquidating inventory isn’t rocket science, it is mostly just a lot of common sense. If you are unloading inventory from your warehouse and it isn’t selling quickly enough, you probably need to lower the price. Closeout brokers and closeout websites may be helpful in offloading overstocked products, but price is the most important.

• Flash Sales & Limited-Time Offers: Create a sense of urgency with limited-time offers and flash sales. Utilize email marketing, social media, and website banners to promote these events. Customers respond to deals when they are afraid someone else may buy them. If you are going out of business or shutting down a warehouse, make your customers aware that you have large quantities of inventory to dispose of, and you will be accepting low offers in an effort to get inventory off your hands quickly. If you are unclear how to liquidate inventory, consider an online search using the following terms: looking to offload inventory in bulk, getting rid of closeouts, shutting down warehouse, going out of business, liquidation process, sell abandoned inventory, looking to get inventory off my hands, closeouts, downsizing business, closeout buyers, excess inventory for sale.

• Bundle Discounts: Combine slow-moving items with popular products to incentivize purchases. Offer bundle discounts or "buy one, get one free" promotions. Sometimes this works, for example closeouts of housewares and overstocked home décor may work well together. If you are liquidating inventory of hardware, it may go with closeout camping products or sporting goods.

• Psychological Pricing: Utilize pricing tactics like "odd-even pricing" (e.g., $9.99 instead of $10) to create a perception of value. Companies that liquidate inventory are very price conscious, so keep in mind the lower the price for excess inventory, the faster you will get it off your hands.

4. Liquidation & Wholesale Options:

• Liquidators: Sell excess inventory in bulk to liquidation companies at a discounted price. This is a quick and efficient way to clear out large volumes of inventory. Every major city is filled with closeout buyers and inventory liquidators interested in large volumes of closeouts. If you are selling closeout pet products, closeout lawn and garden products or simply looking to clear out warehouse space of closeout toys and games, inventory liquidators are a good option.

• Wholesale Distributors: Sell excess inventory to wholesalers who will resell the products to other retailers. This let’s you offload large quantities at one time, and get a diverse distribution. Name brand closeouts may be restricted more than generic brands that don’t care much about interference with regular distribution channels. Selling surplus inventory does not have to be difficult or stressful. The key lies in partnering with reliable and experienced closeout buyers that understand the liquidation process, and can help you liquidate excess inventory quickly.

• Export Markets: Explore opportunities to sell excess inventory in international markets. Liquidation stock can be sold overseas as well as domestically. Keep in mind, name brand closeouts and excess inventory with brand recognition may have restrictions on where they can be sold off.

6. Preventing Future Excess Inventory:

• Demand Forecasting: Utilize historical sales data, market trends, and competitive analysis to accurately forecast demand. Implement inventory management software to track stock levels and identify potential overstock situations. These are all ideas for minimizing closeouts and inventory that needs to be disposed of for pennies on the dollar. Closeout brokers and closeout websites may be helpful in offloading excess inventory before it gets too late in the cycle.

• Supplier Relationships: Negotiate flexible return policies with suppliers to minimize losses on unsold inventory. Build strong relationships with trusted suppliers to ensure timely and accurate order fulfillment. If you store your inventory in a 3PL and are keen to clear stock and liquidate, consider downsizing and moving to a smaller warehouse to save money.

• Regular Inventory Audits: Conduct regular inventory audits to identify slow-moving items and address potential issues proactively. Keeping a close eye on your inventory is the best way to stay on top of any canceled orders, closeouts, excess inventory and overstocked products.

Merchandise USA has been an inventory liquidator for almost 40 years. We buy closeout pet products, closeout housewares and home goods, overstocked inventory of tools and hardware, and excess or unwanted stocks of toys and sporting goods. We can help you with the liquidation process and closeout process if you are looking to offload lawn and garden closeouts, home goods overstock or any excess inventory of stationery and overstock home goods. If you want to get abandoned inventory off your hands and have liquidation stock due to shutting down operations or moving your warehouse, we can help you. If you are keen to clear stock from your fulfillment warehouse because you have to reduce inventory, please call us. Wholesale liquidation companies are not all the same, so consider contacting Merchandise USA if you are looking to get rid of obsolete and surplus inventory. Closeouts and abandoned freight are our entire business. We liquidate overstock inventory quickly and we are capable of buying your entire bulk inventory in one transaction.