Why am I having so much trouble selling merchandise?


There are many reasons you may be having difficulty selling your merchandise in today’s economy, and below are some of the most common ones. Because of this problem, you may be faced with the need to liquidate your excess inventory or get rid of old merchandise. In today’s environment many organizations are sitting with too much inventory and have to find a way to sell it.

1. You are shutting down your business because of Covid-19.

One of the biggest reasons merchandise no longer sells is Covid-19. The novel Coronavirus is changing what consumers buy, and the way they buy. Merchandise that used to sell everyday may no longer be of interest to consumers and you may have to get rid of it at a loss. Some examples of product lines that may have become dead stock during Covid are luggage, travel related merchandise, party goods, personal care products, and anything that requires people to travel or congregate in large groups. Merchandise that used to sell very well can now be excess inventory that is not selling and taking up warehouse space. This is what we refer to as surplus merchandise or excess inventory. It is very costly to hold onto and often the best option is to liquidate this type of dead stock and move on.

2. You are experiencing slow sales because your customers are having a hard time.

Even if you are doing well and managing through Covid, there is a good chance your customers may be having a hard time selling their inventory, and they may go out of business. When Covid-19 started most of our business models stopped working because the consumer’s buying patterns changed. As a result of this many companies are left with products that are not needed in today’s “new” economy, and now fall under the heading of surplus, excess, overstock or dead inventory. The merchandise may be perfectly good inventory but the problem is that it no longer fits the needs of what today’s consumer is buying. There are some statistics suggesting that up to 50% of all small businesses will fail due to Covid-19.

3. You imported too much inventory and now have extra merchandise.

If you imported too many containers of merchandise with forecasts of selling it all through 2020, most likely you have had to reevaluate your business and the direction in which it is moving. Due to all of the recently increased tariffs on imported merchandise, and now having to navigate through Covid-19, warehousing too much inventory has become a common problem. At this time it is challenging to find new markets for all these products, and many of the existing customers have either reduced their buying budgets and in more extreme cases have gone out of business or shut down operations. Again, the end result is from having too much closeout inventory sitting in your warehouse, not selling enough merchandise to cover expenses or merchandise accumulating high storage fees in 3PL warehouses. We are seeing more offers than ever on closeouts in 3PL warehouses and excess inventory that must be sold off.

4. You didn’t pivot appropriately and you are still trying to sell to the wrong market.

There is an old saying “The only constant is change”. We have all been forced to make changes to our businesses and the way in which we operate. But sometimes it is not possible to pivot entirely to a new market or new product line, especially in the midst of a global pandemic. Some companies have no choice but to continue to push the same products to the same market, and to some degree more effort will help but it won’t be enough to move the needle. If you have more inventory than you can reasonably sell to your existing customers, there may be no choice but to liquidate. Keep in mind sitting on dead stock for too long erodes the value more than liquidating it and getting rid of it now. Nobody wants to take a loss when selling inventory that needs to be liquidated, but the alternative of dead inventory sitting in your warehouse is worse. It is better to get something for your merchandise and move on.

5. Your customer base has changed but you did not adapt.

No judgement here, just a fact of life. Some of us are better at change than others. Major change of any kind is extremely difficult under any circumstances, but having to reevaluate and make changes to how we buy and sell merchandise in the midst of a global pandemic is very challenging. Some of us will do better than others, and some of us simply won’t be able to make the necessary changes. For those companies that continue doing the same thing they have always done, and expecting their world to adapt around them, they will not survive. And those are the same businesses that will be forced to liquidate inventory at a loss, sell off large quantities of excess and closeout merchandise, and in many cases they will not be able to recover. This novel Coronavirus has killed more than 1 million people worldwide and has had an unprecedented affect on businesses around the globe. There is no industry that has been spared from the hardships of navigating change and trying to adapt to new ways of doing business.

6. You are trying to sell the wrong product.

There are many product lines that simply will not – can not – be sold during a pandemic. For example, if you have a company that only sells travel related merchandise it is unlikely you will be able to continue with business as usual. If airline travel is down 90%, it is unlikely consumers are buying neck pillows to make their flights more comfortable. If hotel reservations are down 70% and you supply hotels with all of their towels and bath mats, it is unlikely you can maintain your sales. You can either liquidate all your inventory and get rid of it now at a loss, or you can try to pivot and find alternative markets that can use these items. But in either case, it is unlikely you can remain profitable selling product lines that are not aligned with the products consumers are buying during the pandemic.

We are seeing unprecedented changes in the way business is being done. We are looking at more offers than ever of excess inventory, surplus inventory and unsold merchandise. Companies are closing down and downsizing warehouses, they are moving warehouses in an effort to find cheaper storage, and looking for other ways to reduce inventory. So for many reasons there is a large volume of excess merchandise that is getting liquidated. But we are faced with the same challenges as every other business. We can only buy those categories of merchandise that fit the needs of consumers during a global pandemic.