Having inventory on hand is important so you can sell to customers and achieve sales. But unsold inventory can cause problems when it piles up over time, leading to what’s known as ‘dead stock’. When this accumulates, it can significantly impact your bottom line.
Some of the common causes of dead stock include over-ordering, inaccurate demand forecasting, lack of quality control and poor marketing/sales efforts. Offloading dead stock is key to maintaining healthy profit margins. In this article, we’ll go over how you can get rid of it and avoid dead stock inventory so it won’t be a dead weight for your business.
Accurate demand forecasting
When the right data isn’t being tracked, it can lead to miscalculated future demands. This will cause your business to be misinformed on what products are in demand and how fast they will sell. Pull out accurate historical order data so you can better forecast demand and make other decisions such as planning future warehousing needs, creating an effective pricing strategy and running a sales campaign. When you can get insights into future demand, you won’t have to deal with too many slow-moving items and fail to make a profit.
Set reorder points and safety stock
Reorder quantity refers to the number of product units you requested from your supplier or manufacturer to replenish your inventory. The key is to avoid ordering excess inventory without understanding how much you will sell in a given period, but also having enough safety stock so you won’t run out till the next purchase order. There is a fine line to balance between having excess stock – so take the time to implement an inventory control system. This helps you track important distribution metrics, like inventory turnover ratio, so you can make better decisions on how much inventory to purchase and when to restock.
If your business is growing and demand is high, you may require more space to store your inventory in a bigger warehouse. Our property at 18 New Industrial Road offers cheap warehouses for rent
, located at the city fringe with accessibility via KPE and CTE as well as Tai Seng MRT station. This 6-storey B1 industrial building has a façade facelift and revamped layout, offering a professional corporate image inside and out. There is 1 unit available for rent at 2,626 sqft with aircon, 3.8m ceiling height and 15 kN/m2 floor loading capacity. Our subsidiary, Work+Store is also located within the premises to offer storage unit options that start-ups, e-commerce businesses and entrepreneurs can use to carry out their duties. Other facilities include 20-footer access, 2 loading bays, 24-hour access & CCTV, F&B nearby and complimentary parking for the 1st lot.
Resurrect the value of your dead stock
The more inventory you have, the more it will cost you to store it. Dead stock will also end up taking over valuable space that could store other popular, newer products. As such, it’s important to do an inventory audit so you can quickly remove inventory that is unlikely or slow to sell. Dead stock presents a good opportunity to attract bargain shoppers. Consider holding clearance sales or creating a discount section where you offer them for a lower price. Also, you can try to bundle the dead stock with a fast-selling item, and throw in a free shipping deal to appeal to your customers.
With proper inventory management
, you can expect to move along your goods, make greater sales and maintain profits. As your business grows, consider getting a bigger warehouse to accommodate more inventory as well. Our property at Space @ Tampines offers industrial spaces and warehouses for rent, suitable for companies in Clean & B1 Light and B2 environments. Located near major retailers like Giant Hypermart and IKEA Tampines, this 7-storey property offers a good volume of customer footfall, especially since the ground level houses numerous interior design and home furnishing companies that are open to the public. It is also accessible via TPE and PIE, as well as Tampines and Pasir Ris MRT stations. This location is favourable amongst businesses that require warehouse logistics needs such as sorting, storing and delivering. Unit sizes range from 2,629 to 10,683 sqft – with bare furnishing, 6m ceiling height and 15 kN/m2 floor loading capacity. Other facilities include 24-hour access & CCTV, 6 loading bays with dock levelers, wide ramp-up, 40-footer access, heavy vehicle parking and season parking for cars/motorcycle.
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