How to Minimize Losses When Offloading Excess Inventory and Getting Rid of Closeouts.

Excess inventory is a common and costly problem for businesses of all sizes. Whether it's due to overproduction, poor forecasting, or changing market demands, having too much obsolete inventory on hand can significantly impact cash flow, storage costs, and ultimately, profitability. We are going to outline effective liquidation strategies to minimize losses when offloading excess inventory, including closeouts, overstock, and liquidated products.

1. Accurate Inventory Assessment & Categorization

• Identify the Problem:
  • Slow-moving inventory: Items with low sales velocity compared to historical averages. We all have slow selling products we need to get out of the warehouse to make room for new products.
  • Obsolete inventory: Products that are no longer in demand due to technological advancements, changing consumer preferences, or seasonal shifts. This can be anything from surplus inventory of closeout toys to excess inventory of discontinued lawn and garden products to housewares.
  • Damaged or defective inventory: Closeout and obsolete or surplus products that are unusable or require significant repairs.

• Categorize Inventory:
  • A-List: High-demand, fast-moving items.
  • B-List: Moderate demand, steady sellers.
  • C-List: Low-demand, slow-moving or obsolete items. This category requires the most attention for offloading and getting rid of dead stock.

2. Strategic Pricing & Discounting

Gradual Price Reductions:

Start with small, incremental discounts to gauge customer response. This will often be enough to get discontinued products or closeouts moving again.  Customers are generally responsive to discounted prices on closeouts and excess inventory you are having a problem selling.

Gradually increase discounts over time, using a tiered approach. The longer the product hangs around, the cheaper it gets. Slow selling products that sit in the warehouse for more than 6 months should be liquidated to closeout inventory buyers because they act quickly.

Flash sales and limited time offers:

Create a sense of urgency with limited-time offers and flash sales. Getting rid of inventory, you don’t want or need anymore doesn’t have to be a problem. Flash sales and limited time offers are good ways to find closeout buyers willing to take the entire inventory if you make it cheap enough. Don’t forget – the price you recover for closeouts is not nearly as important as getting products out of the warehouse and cleared off your warehouse floor. Utilize email marketing, social media, and website banners to promote these events and make a big production of how much money you are willing to lose just to get rid of your overstock and excess inventory.

Bundle Discounts:

Combine slow-moving items with popular products to incentivize purchases. Closeout pet products and overstock sporting goods might be good for the same customer. Likewise, you can bundle excess inventory of lawn and garden items with abandoned inventory of hardware and tools. Again, these may be marketed to the same customer.

Offer bundle discounts or "buy one, get one free" promotions. Do whatever you can to offload closeouts quickly. If you are keen to clear stock from your warehouse it’s always best to offer steep discounts and look for inventory buyers capable of taking the entire inventory at once.

Psychological Pricing:

Utilize pricing tactics like "odd-even pricing" (e.g., $9.99 instead of $10) to create a perception of value. We often see closeouts priced $5.88 and $7.88 as something a little different. Closeout buyers and shoppers looking for deals on overstocked products might respond to this pricing more than typical $4.99, $9.99, etc.

3. Effective Sales & Marketing Channels

• Online Marketplaces:
  • Leverage platforms like Amazon, eBay, and Etsy to reach a wider audience. If you are an ecommerce seller with overstock ecommerce inventory, this may be the perfect platform for you because you already have the customer base. If you have overstock ecommerce inventory sitting in a 3PL warehouse that you need to get rid of, consider posting it online.
  • Optimize product listings with high-quality images, compelling descriptions, and competitive pricing. The old saying “a picture is worth a thousand words” is true when it comes to selling abandoned inventory and offloading closeouts. Inventory liquidators want to see what the product and packaging look like.
• Social Media Marketing:
  • Utilize social media platforms to promote sales, engage with customers, and run targeted advertising campaigns. Some of our most successful customers are always posting new closeouts and overstocked deals on Facebook and Instagram. This is the cheapest and most effective way to get customers for excess inventory that changes on a daily basis.
  • Consider platforms like Facebook, Instagram, and TikTok.
• Email Marketing:
  • Build an email list and send targeted promotions to your subscribers. This way, as you unload new shipments of unwanted merchandise and dead stock, your customers will be notified.
  • Offer exclusive overstocked discounts and early access to closeout sales for loyal customers.
• Consignment Sales:
  • Partner with consignment stores or online platforms that specialize in selling overstock products, discontinued items, closeouts and excess inventory.

4. Liquidation & Wholesale Options

• Liquidators:
  • Sell excess inventory in bulk to liquidation companies at a discounted price. If you are having trouble finding an experienced and reliable closeout buyer, try searching online using these search terms: closeouts, offloading excess inventory, looking to clear out old inventory, keen to clear stock from warehouse, looking for the largest closeout buyers in U.S., selling overstocked products, discontinued items, company was acquired have leftover inventory, closeouts.
  • This is a quick and efficient way to clear out large volumes of inventory at one time.
• Wholesale Distributors:
  • Sell excess inventory and closeouts to wholesalers who will resell the products in bulk. If you are downsizing warehouses or shutting down your business, you will want to rely on wholesale closeout distributors to help you.
• Export Markets:
  • Explore opportunities to sell excess inventory in international markets. Many name brand closeouts have restrictions and must be unloaded outside of the United States. Often, major brand distributors do not want to unload excess inventory in the U.S. out of fear it may interfere with their normal channels of distribution.

5. Repurposing & Creative Solutions

• Donate to Charity:
  • Donate unwanted inventory to charitable organizations for tax deductions and positive brand image. Sometimes it is better to donate inventory free rather than tie up warehouse space.
• Repurpose Inventory:
  • If possible, repurpose the materials from obsolete products, closeouts and other dead stock to create new products from existing surplus and obsolete inventory.
• Employee Discounts:
  • Offer employee discounts on excess inventory, closeouts, abandoned inventory, unwanted products and other merchandise your company is trying to get off it’s hands as a morale booster and to reduce stock levels.

6. Preventing Future Excess Inventory

• Demand Forecasting:
  • Utilize historical sales data, market trends, and competitive analysis to accurately forecast demand. This is the best way to prevent closeouts and overstocked products from piling up in the warehouse and taking up warehouse space needed for new products arriving.
  • Implement inventory management software to track stock levels and identify potential overstock situations. Although much of this still has to be done manually, it is possible to automate how much inventory to order, and how often, so you don’t have duplicate orders creating overstock inventory. This also applies to getting rid of overstock and canceled orders.
• Supplier Relationships:
  • Negotiate flexible return policies with suppliers to minimize losses on unsold inventory. Some vendors my take back products so you don’t have to look for inventory liquidators who may only give you pennies on the dollar, keep in mind, closeout buyers are useful when you are keen to clear stock from your 3PL warehouse to avoid storage costs. However, they will only pay a small percentage of the original wholesale cost.
  • Build strong relationships with trusted suppliers to ensure timely and accurate order fulfillment.
• Regular Inventory Audits:
  • Conduct regular overstocked inventory audits to identify slow-moving items, abandoned inventory, closeouts or excess inventory to address potential issues proactively.
• Continuous Improvement:
  • Regularly review and refine your inventory management processes to identify areas for improvement. One of your priorities should be to identify dead stock sitting on pallets and closeouts that have not been sold in the past year.

7. Minimizing Storage Costs

• Optimize Warehouse Space:
  • Implement efficient warehouse layout and storage strategies to maximize space utilization. Keep inventory moving in and out of your warehouse because dead stock not moving is costing you more money than you might realize.
  • Consider utilizing off-site storage options for less frequently accessed inventory. If you are considering moving warehouses or shutting down a warehouse, consider getting rid of any overstock inventory before making such a move.

Merchandise USA specializes in buying abandoned inventory, closeout lawn and garden products, excess inventory, overstocked pet products and dead stock from companies going out of business or downsizing to smaller warehouses. If you are considering moving 3PL warehouses we can help you understand the liquidation process and closeout process. Having too much inventory sitting in your warehouse directly affects your bottom line. We buy toy and novelty closeouts, overstock inventory of home products and home goods, overstock housewares, closeout toys and liquidation sales of all types. If you have canceled orders in your warehouse or if you are looking to get extra inventory off your hands we can help. Also, if you are shutting down your warehouse due to excessive storage fees, we are an experienced and reliable closeout company. The closeout liquidation process is easy and we can walk you through liquidating your entire inventory. If you are closing down all operations and keen to clear stock from your warehouse, call us today.