The Advantage To Building A Large Closeout Inventory.

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Inventory management affects your ability to operate a profitable business in several ways. Typically, a closeout distributors want to hold just enough inventory to meet near-term customer demand, according to Entrepreneur magazine. Excess inventory is costly to hold and manage and in most cases it makes sense to sell excess inventory and obsolete products to make room for new products and clean out the warehouse. It is easy to ignore too much inventory sitting in the back of your warehouse, but it will eventually become a problem.

In comparing the extremes of running out of stock and holding more inventory than you need, stock outs are definitely worse. If you have too much inventory it will always be easy for your customers to order, but if you have obsolete products you are not longer selling, this is a different story. If customers come to your business and you don't have goods they want, you risk alienating them and losing them to competitors. Carrying extra inventory in your retail storage area or in a nearby distribution center helps keep shelves fully stocked during periods of peak customer demand, and is one of key benefits of holding stock. But if you have a large inventory of slow moving products or dead stock, this is not good. It is always best to sell excess inventory you don’t need to closeout distributors or closeout wholesalers. These businesses specialize in liquidating inventory that is no longer needed. They will make you an offer to buy everything in one fell swoop, pickup the entire inventory, and pay you cash. Overstock closeouts can become a problem if they take up valuable warehouse space and prevent you from bringing in new and profitable inventory.

For businesses that sell physical products, inventory represents a non-liquid asset that must be converted into cash through sales. How efficiently a business manages this process will determine its profitability. Part of this process is to sell excess inventory and obsolete products that have no or little value. It is better to have an overstock liquidation sale than sit with old inventory in the warehouse. With inventory carrying costs generally accounting for 15-30% of a business’s total inventory value, carrying cost is an important metric to keep an eye on. The definition of inventory carrying cost is simply the expenses a company incurs to hold inventory items over a period of time before they are used to fill orders. Companies that buy overstock can help you eliminate these carrying costs by liquidating excess merchandise.

Fully stocked shelves or promotional displays also contribute to effective in-store displays. An aesthetically-pleasing store setup is integral to keeping customers around and getting them to return to your store. Closeout distributors can both buy your inventory as well as sell closeouts to help fill stores. Fully-stocked shelves give the impression that your company has good product variety and assortment. Fully stocked shelves or promotional displays with closeouts and overstock specials also contribute to effective in-store merchandising. An aesthetically-pleasing store setup is integral to keeping customers around and getting them to return to your store. Fully-stocked shelves give the impression that your company has good product variety and assortment. This can be a combination of regular import products and closeouts. Liquidation buyers will look for special deals on inventory priced below regular cost in an effort to improve profit margins. Companies that specialize in liquidating closeouts can help you fill store shelves with name brand closeouts at a fraction of regular costs. You can search online for closeout brokers and overstock merchandise buyers. A simple Google search may include inventory liquidators, closeout distributors or closeout wholesalers.

Negotiating bulk deals is a huge factor in your ability to achieve profit as a reseller. Closeout distributors if they have too much inventory and want to get rid of some merchandise. The cost to sell goods goes down for the distributor if it can sell more to one buyer. Lowering your per-unit cost by making larger orders improves your profit margin. If you can buy 1,000 widgets at $1 per widget as opposed to 500 widgets at $1.20 per widget, you save $0.20 per widget. Closeout distributors will work on smaller margins because they have high turnover. This helps when you buy surplus inventory or discontinued inventory because you will be getting a lower price, in part due to the volume.

Inventory risk is the chance that items in storage can become unsaleable before they can be sold and converted into liquid assets. This risk generally comes from shrinkage and obsolescence. Warehousing obsolete stock is costly and it should be disposed of before the expense becomes more than the inventory is worth. If your costs are too high you will be forced to closeout your 3PL wrehouse and dispose of the merchandise. Inventory liquidators will make you an offer to buy everything at one time, eliminating the need for 3PL warehouse expenses. Shrinkage is the loss of salable product due to damage, theft, or errors in record keeping. Obsolescence is the loss of salable products due to product expiration or retirement and is an issue for closeout wholesalers and closeout websites carrying products with a short shelf life. Product obsolescence goes down as a write-down or write-off and eats directly into a business’s bottom line. Closeout merchandise is part of running any business and selling surplus inventory is as important as moving regular profitable goods.

Holding on to obsolete stock and excess inventory becomes a drain on your company's productivity. By monitoring inventory activity, you may track a product from the day it enters your warehouse up until the time when it can be returned to the manufacturer if it isn't sold. You can develop product rotation agreements with your suppliers that allow you to return unsold product for a restocking fee. If you can’t return them you can liquidate inventory to surplus buyers and overstock buyers. You can also donate inventory to charities or other giving organizations. You can get most of your money back for the unsold items as long as you monitor your inventory and keep track of those unsold items that need to be disposed of. When you keep just enough inventory to get through the normal sales cycle, shelves can look sparse as you get closer to the next time to order. The appearance of full shelves sends a positive message to the customer that business is good and the store is ready for business. Selling overstock inventory is key in keeping 3PL storage costs in line with the amount of business you are doing. Keeping a store stocked with items to sell requires adequate inventory. Business owners should look at several types of inventory control to determine the best method.

When you have excess inventory, you pay for the order, the storage and insurance. You can't get around this. For businesses that are working with small margins and on tight monthly budgets, this can hamper business development decisions because they don't have cash on hand. Business owners might examine the disadvantages pertinent to the business and then decide whether carrying excess inventory makes sense. It is up to each business owner to review the financial health of his company. Inventory is one key factor. Companies that liquidate inventory are always an option for disposing of excess stock or reducing inventory. Closeout brokers can help if you have large quantities of just a few items, whereas closeout websites are a better alternative to getting rid of inventory in smaller quantities.

Merchandise USA is an excess inventory buyer and closeout distributor in business 37 years. We buy closeout sporting goods, closeout toys, overstock housewares and home décor, and excess inventory of lawn and garden products. We can help you get rid of old inventory and dead stock by making an offer to buy your entire warehouse.