Strategies for turning dead inventory into cash.
A recent conversation with a client reminded me of how much some small (and not-so-small) retailers struggle with dead inventory. My client related how, slowly, gradually, almost imperceptively over time, the percentage of dead inventory had grown. And as it was growing, the problem was thought to be modest, because the rate of growth appeared to be modest, so modest measures were taken to deal with it. An extra markdown here, a special promotion there, but still there seemed to be more of it this month than there was last. Finally, when the sheer amount of inventory involved became inescapable, and the realization came that the measures to deal with it weren't close to being sufficient, the whole thing started to feel overwhelming.
So if you're looking at a build up of dead inventory, and feel a little overwhelmed by the enormity of it, here are a few ideas to help you get started turning it into cash.
When you are confronted with a build up of dead inventory, it's critical to make a clear headed but realistic assessment of what it's going to take to move it through. It's losing market value every additional day it's sitting there. It represents cash that is likely needed for other critical business purposes, such as paying vendors, reducing debt, fleshing out assortments or stock levels of key items or categories, or opening additional stores. The time to get started is now.