A surplus refers to the excess stock of something such as apparel, food, and other consumer items. You can even consider having excessive amounts of money as a surplus. But who would even complain of having excess amounts of money in the first place? On the contrary, a surplus on product inventory may not be a source of happiness for a lot of warehouse managers and business owners.
For one thing, excess inventory means lesser warehouse space. It may also be an effect of ineffective forecasting or inefficient product planning. Nevertheless, excess product inventory is a major nightmare for a lot of manufacturing and retail companies. On the other hand, it can actually be a blessing for industrial surplus buyers.
Different options of dealing with an inventory surplus
Industrial and retail business owners have various ways of dealing with excess inventory. It depends on the type of items that need to be dealt with the soonest. If these are perishable goods like canned goods and the like, it should be disposed of immediately.
A lot of retailers would go on sale or discount promos to move these food and other products meant for consumption. It can mean a decrease in revenue, but at least these items won’t end up in waste. Food and other perishable products are also usually donated to soup kitchens and for other good causes.
On the other hand, disposing of non-perishable goods like clothing and other retail and industrial items may not be as urgent as disposing of food. Like surplus food, surplus non-perishable goods such as clothing can also be disposed of accordingly through discounts and other promotions. Companies also sell these products to other smaller businesses.
How to avoid inventory surplus
By now, you already have an idea of what you can do to deal with excess item inventories. However, it can be better to avoid dealing with excess inventories in the first place. One way is by improving business operations that usually deal with inventory management.
Forecasting is important in every business. This plays a major role in determining how much to produce and the right amount to maintain stock (not overstock). Customers’ purchase behavior will help determine the right quantity needed for production. It is also important to take note of your regular customers and their average number of orders per month.
It is also important to update your inventory information regularly. That way, you can track orders and current stock, and determine which items move and which ones are not as sellable. From there, you can take the necessary steps to maximize your inventory, remove non-moving items, and ensure efficient business operations.
All businesses may have already dealt with excess item inventory at some point. It may be due to forecasting errors or a sudden change in customer demand. Nonetheless, it can be a hassle dealing with surplus inventories. However, there are ways to manage these items.
You can sell the excess items at a discounted price or donate it for a good cause. You can also partner with other businesses to help you move the excess inventory from your warehouse. That way, your items won’t end up into the waste and somehow still earn profit from them.