What to do with non-moving stock?
What to do with your non-moving stock?
Non-moving stock is one of the biggest problems any retail or e-Commerce business has. It brings huge costs and blocks cash flow from purchasing new merchandise and grow.
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.
In addition to a product’s COGS, non-moving stock can be up to 50% more!
You also need to consider the cost of the Wearhouse, handling costs, opportunity cost, insurance and other administrative expenses.
Many e-Commerce businesses put most efforts on sales.
But revenue is not the main goal of a store. What is? PROFIT.
In order to run a profitable store, you must not neglect a critical part of your business, that is your non-moving stock.
Here are 3 ways to move your non-moving stock:
- Discounts and sales
Identify products that their sales rate is not enough to finish stock in time (end of season, expiration date, etc.). Give them a discount or include them in sales in order to move stock without losing a lot of margin, in oppose to wait for clearance sales and sell them for minimum margin or at a loss.
- Products sorting
Locate products that need more exposure to get sales at the top of collection pages and reduce their non-moving stock
- Products recommendations
Promote these products on your recommendation engines to get them more exposure and sales
Always be aware of products that create non-moving stock, identify them on time and react in real time. Aim to increase sales but do so while efficiently using your stock.
If you want to know more contact us