What to Do with Non-Moving Stock? 3 Quick Tips to Boost Sales and Profits
What to do with your non-moving stock?
Non-moving stock is one of the biggest problems any retail or eCommerce business has.
Why? It brings huge costs and blocks cash flow from purchasing new merchandise and growth.
On average, around 20%-30% of stores’ total stock is non-moving (dead) stock. This costs you more than you know.
There are many hidden costs for this stock. Plus, a product’s COGS and non-moving stock can be up to 50% more. Brands also need to consider the cost of the warehouse, handling costs, opportunity cost, insurance, and other administrative expenses.
1. Strategic Discounts and Sales
The first way to move the dead stock is with promotions. But not any old promotions. You want to:
- Identify products whose sales rate is not enough to finish stock in time (end of the season, expiration date, etc.)
- Give them a discount or include them in sales in order to move stock without losing a lot of margins
Planning strategic discounts and sales instead of waiting for clearance sales and selling them for minimum margin or at a loss will help you continuously move stock without sacrificing on profit.
2. Advanced Product Sorting
Next, you will need to upgrade your product sorting strategy to factor in both marketing and retail KPIs.
How? With advanced inventory optimization and multi-parameter product sorting and merchandising. Parameters such as:
- Variants stock ratio
- Product page views and reviews
- Margins and/or real margins (with discounts)
- Conversion rates
- Inventory value
- Sales by quantity and/or revenue
- Number of days in stock
- Days to finish inventory (based on product daily sales rate)
- Personalization based on real-time shopping behavior
The best way to do this is by using a holistic, AI-powered eCommerce merchandising solution like Kimonix.
You can sign up here for a free demo.
3. Smart Products Recommendations
Lastly, you will want to promote these product collections on your recommendation engines to get them more exposure and sales. You also want to make sure that you optimize your category pages. Why? Optimized pages mean:
- Increased traffic and boosts SEO
- Improved user experience
- More guided marketing strategies
- Better optimized online merchandising space
To prevent and mitigate non-moving stock, brands should always:
- Be aware of products that create non-moving stock
- Identify them on time
- Be able to react in real-time
Simply put, your aim is to increase sales but do so while efficiently using your stock.
For a more comprehensive breakdown of these strategies, visit our guide to Winning Non-Moving Inventory Strategies post.
If you want to know more about advanced eCommerce merchandising, contact us.