What exactly does this word mean? What are closeouts and why are they a necessary part of running any wholesale business? Let’s take a few minutes and review this.
Rule #1: Not every item is a winner. Rule #2: Get rid of items that aren’t winners.
There is no point in struggling to sell weak items at full price. It takes too long, it costs too much, and at the end of the day your customers still won’t do well with these items. Using the word “closeouts” is the same way as saying reduce excess inventory or sell surplus inventory. Other synonyms for closeouts are discontinue inventory or sell surplus inventory.
Today’s consumer is very savvy and they know exactly what they want and how much they are willing to pay. This makes our job as business owners and salespeople more challenging than ever because the internet allows today’s buyer the luxury of finding exactly what they want, and at the lowest price, without ever leaving their house. If we have merchandise that isn’t selling, it is our responsibility to reduce excess inventory in slow moving items and replace it with what the consumer wants. If we continue trying to sell what we want instead of what our customers want, we will soon have a warehouse filled with obsolete inventory and will have no choice but to liquidate.
We do best when our customers do well. Our customers do well when we give them products they can sell. It’s really a simple fact but sometimes we lose sight of the way it works because we are too busy concentrating on our own needs instead of our customer’s. If we fill our warehouse with a bunch of “stuff” that nobody wants, we will soon have nothing but obsolete merchandise and surplus inventory with little or no value.
What makes more sense would be to reduce excess inventory and replenish your old stock with what will actually sell. Survey your customers for what they want, research your market, attend trade shows and talk to buyers in your target market. Do whatever it takes to get a better vision of what will be popular among your customers. Otherwise it will be an uphill battle and you will always have surplus inventory because you didn’t address your customers needs. Obsolete merchandise is not only costly because it doesn’t sell, but it also takes up valuable warehouse space that could be used for more profitable inventory.
Closeouts and obsolete merchandise will always be a part of doing business.. The key is to reduce excess inventory to a manageable level where it doesn’t adversely affect sales.