Retailers Are Out Of Stock. Why Is My Warehouse Filled With Excess Inventory?

closeout brokers overstock liquidators

Just because retailers are hmerchandise in stock doesn't equate to you necessarily having an empty warehouse. It is likely the closeouts you have may not be the same items or categories retailers currently need. There is always a need to sell overstock to excess inventory buyers, no matter what the business environment looks like.

According to CNN News, products were out of stock online 24% more of the time in August from a year earlier across the 18 product categories tracked by Adobe Analytics, according to a report released by the company. When compared to January 2020 -- before reports of the Covid-19's spread across the United States emerged -- the jump in August 2021 was even bigger: 172%. Wholesale merchandise has been abruptly disrupted by supply chain issues related to inventory management problems. Closeout buyers are scrambling to keep pace with the disruption and excess inventory buyers are seeing shortfalls in some areas, but huge amounts of closeouts in others. Businesses that need to sell overstock inventory have found supply chain woes are affecting them, as well. Closeouts are always available in every business condition and there are always opportunities to find buyers interested in special deals and discounted products.

The problems have prompted concern over getting enough closeouts to stores in time for the holiday season. A few retailers have already said they expect to offer fewer discounts and deals because of tighter inventory. Wholesale merchandise companies are especially vulnerable during these challenging times, and they have to find new and creative ways to deliver much needed inventory.

"What this tells us is that consumers should make two lists for their holiday shopping," said Taylor Schreiner, director with Adobe Digital Insights . "One is a list of items that they know they can get shipped early and other items that they don't necessarily care about the brand but will buy when they get the best discount." This is where excess inventory buyers can take advantage of surplus deals or overstock that may be a great deal; it just might not ship right away. Closeouts may not be prioritized right now because retailers want to get their hands on profitable goods rather than overstock or obsolete inventory where they are losing money.

Shoppers are signaling they're anxious about products running out. A new Deloitte survey of consumers showed three out of four consumers are concerned about out-of-stock situations when they shop -- especially in electronics and toys -- and are beginning their shopping earlier this year. The Deloitte survey polled 4,315 consumers online between Sept. 7 to Sept. 14. Wholesale merchandise is not available in the same quantities we have been accustomed to. There used to be enormous amounts of excess inventory and closeouts available as companies were motivated to sell overstock and liquidations toward the end of their fiscal year. But with the effects of the supply chain disruptions, there simply is not as much stock. Companies may still have excess inventory in their warehouse due to slow sales, package changes, closing a warehouse down, shutting down your business, or other reasons. Closeout websites have become very popular as a way for businesses to get rid of old stock and liquidating inventory. Flash sales have become the new normal for online sellers, much the way brick and mortar stores used to advertise 50% off sales to get rid of old inventory.

The coming months may be especially crucial for retailers as they try to woo shoppers back to stores, where closeout sales tend to be more profitable. Consumers have money they’ve stashed away after saving on commuting costs, eating out and traveling. Some have stimulus checks waiting to be spent. These shoppers may hit the mall to buy surplus inventory and overstock deals that have been off their radar for months. Amazon FBA closeouts are available more now than ever, and consumers are buyers for excess inventory and buyers for liquidations more than anytime in the past 20 years.

Merchandise USA is a closeout buyer and specializes in liquidations, discontinued inventory, overstock, closeouts and excess inventory.