A recent survey revealed that 98 percent of retailers struggle with excess inventory. In the fast-paced retail world, effectively managing inventory is crucial for maintaining both operational efficiency and financial stability. Excess inventory can tie up valuable resources, lead to higher storage costs, and limit a business's ability to invest in highly-demand products. 

As Black Friday Cyber Monday 2024 (BFCM) approaches, this end-of-year sales event provides the biggest opportunity to address your inventory challenges. With consumer demand at its highest, BFCM not only provides retailers with a strategic way to free up space and capital for new inventory but also sets the stage for a stronger start to the following year.

(Source: The Rave Cave)

Importances of Inventory Liquidation

Maximizing storage space

Excess inventory can significantly reduce the storage capacity of your warehouse, preventing it from operating at maximum efficiency and potentially creating logistical bottlenecks. By liquidating slow-moving items, businesses can free up lots of valuable space, thereby allowing for a smoother flow of goods. This process not only helps clear out less profitable items but also makes room for more profitable products, optimizing the overall storage space and improving warehouse efficiency.

Minimizing financial losses and improving cash flow

When a business holds on to too much inventory, it not only wastes valuable space that could be used for more profitable items but also incurs significant financial losses over time. Keeping unsold products in storage leads to ongoing expenses such as storage fees, additional staffing, utility costs, and other operational costs required to manage and maintain that inventory. The longer these products remain unsold, the more these costs accumulate, eating into the company’s profitability. 

By reducing the costs associated with maintaining low-demand products, businesses can improve their cash flow and redirect their budget toward items that sell quickly and generate higher returns. This improved cash flow, in turn, makes it easier for businesses to manage and adapt their operational expenses, leading to greater financial flexibility and stability.

Minimizing risk and waste

Excess stock increases the likelihood of inventory waste and risk due to factors, such as accidents, spillage, mold, corrosion, or water damage. The longer these items remain in storage, the greater the chance they will become unsellable or damaged. For example, perishable goods like food or cosmetics can become spoiled if they are not stored in proper conditions or if they are kept for too long. Similarly, electronic products or metal-based items might corrode or suffer from moisture damage if exposed to unfavorable environments.

Additionally, the need for liquidation becomes even more urgent when products near their expiration date, particularly in industries with perishable goods or rapidly changing consumer trends. For instance, fashion retailers often face significant risk when holding onto seasonal items that quickly go out of style. In such cases, liquidating excess inventory can help businesses minimize these risks and reduce waste, protecting their investment and making room for new, in-demand products.

Tips to Clear Our Inventory during BFCM

Boosting your campaign across multiple channels

By promoting your sale campaign to a wider audience, you can reach potential customers who may have a greater interest in your excess stock, rather than relying solely on your existing customer base. These loyal customers are those consumers who have no feelings for the surplus items in your storage and may not be interested in purchasing them even on a big sale event.

Broadening your reach allows you to tap into new customer segments with different needs and preferences, increasing the likelihood of clearing out inventory that may have been difficult to sell. Furthermore, advertising on diverse platforms enables you to showcase your deals to a wider range of shoppers who are actively searching for discounted products during BFCM, optimizing your chances for a successful sale and building a new customer base that can convert into loyal customers. 

Adjusting how you showcase your overstock inventory

Adjusting how you showcase and price your overstock inventory during Black Friday Cyber Monday (BFCM) can significantly enhance your ability to clear out excess stock. For the Shopify store, you can make your overstock items more visible by

• Strategically positioning them near high-traffic or popular product categories can capture attention.
• Link overstock inventory to related product pages, offering customers a seamless browsing experience and increasing the likelihood of these items being seen.

Giving discount for the slow-moving inventory

Offering discounts on the surplus inventory during BFCM is the most used way to clear out excess stock. You can consider taking advantage of either of the strategies below: 

• Bundle deals

Bundle provides an opportunity to pair overstocked items with best-selling or newly launched products in your store. By combining these items into a special offer, you can create an attractive deal that encourages customers to purchase both. 

For example, you could bundle a slow-moving item with a popular one at a discounted rate, incentivizing shoppers to take advantage of the combined value. This not only helps clear out your excess inventory but also continues driving demand for high-performing products. 

However, it’s important to account for the fact that you’ll likely need to discount one of the items to create an appealing offer, which may slightly reduce your profit margin. Despite this, the long-term benefit of moving unsold stock quickly can outweigh the short-term cost.

• Free gifts

This method is particularly effective toward the end of the year, when shoppers are already looking for deals. You can use your overstocked items as free gifts that customers receive when they meet a minimum purchase threshold, such as spending $100 or buying a certain number of items. 

This tactic not only helps to move unsold inventory but also encourages shoppers to increase their average basket size, often leading to higher overall revenue. In many cases, the increase in sales generated by the larger basket sizes can more than offset the cost of the free gift, making this a profitable way to reduce excess stock while enhancing customer satisfaction.

Looking for an app allowing you to set up the bargain discount deal? Take a look at our Salepify with the easy-to-use Free Gift and Package Deal configuration!

Stay updated on inventory levels

By closely managing your inventory and monitoring which SKUs are selling and which items need replenishment, you can prevent overstocking of certain products. This real-time insight allows you to act quickly in replenishing inventory without delay. Additionally, keeping a close eye on stock levels ensures that once your outdated or slow-moving inventory is cleared, you can promptly refill with fresh items, avoiding any disruptions in your sales flow.

Having an accurate understanding of your inventory also helps you identify which items are not performing well, so you can adjust your promotions or pricing strategies to move those products faster. By staying proactive, you can maintain a balanced inventory, meet customer demand during peak sales periods like BFCM, and avoid the risk of running out of popular items while ensuring your stock turnover remains efficient.

Showcasing celebrity or influencer endorsements

When a celebrity endorses a product, many of their fans are often eager to make a purchase, even when they don't necessarily need that item. This phenomenon not only helps you move more products quickly, but it can also introduce your brand to new customers within the celebrity's fan base. If these new customers are satisfied with their purchase, they may become repeat buyers, further expanding your customer pool.

For brands with a strong financial ability, you can consider booking a celebrity to become the spokesperson for your entire brand or for specific products or product lines. For brands with more limited budgets, a more cost-effective approach is to collaborate with celebrities or influencers to post reviews, product experiences, or unboxing videos on their social media channels. 

(Image source: peertopeermarketing.co)

To wrap up

Inventory liquidation during BFCM is not only a necessary task but also a strategic opportunity to optimize your stock management and boost revenue.

By leveraging various tactics such as multi-channel promotions, strategic product bundling, offering free gifts, staying on top of inventory levels, and taking advantage of the celebrities' influence, businesses can effectively clear out slow-moving items. Implementing these strategies allows retailers to reduce waste, improve cash flow, and make room for fresh inventory, setting the stage for a strong start to the new year.