A Comprehensive Guide to Buying Inventory Stock

It is imperative for businesses to pay attention to how much inventory they need to order and when. It is actually a necessity in order to minimize storage costs and still have a surplus to meet customer demand. Buying inventory stock is a critical aspect of the inventory management process and hence needs optimization to achieve steady growth.

Ways of Buying Inventory Stock 

Manufacturers and retailers use several methods to buy inventory stock and each of these methods has its pros and cons. So, let’s have a look to understand what works for you.

 

Bulk Buying: One of the most well-known ways to buy inventory stocks, is where a company buys the inventory in bulk units that are stored at its own facility or third-party warehouse. This involves buying finished products or raw material in large quantities and is done to ensure supply for future demand. 

Pros: Buying in bulk can result in discounts and a greater profit margin due to less cost per unit.

Cons: Storage/ warehousing cost and inaccurate forecasting could lead to loss.

Drop Shipping: With dropship, no actual buying of inventory stock is involved, instead items are purchased from a third-party supplier as per the customer order. The supplier directly ships the product to the customer, as a result, the retailer does not have to handle or own the stock themselves.

Pros: No need for inventory management, no warehouse needed, no cash tied up in inventory.

Cons: less profit margin, no control over branding, tough competition.

Just-in-time: This is better suited for retailers that manufacture their own product and involves ordering raw materials and fulfilling each order as and when it comes in. it requires less ‘on hand’ inventory but a highly reliable supply chain.

Pros: Reduced warehouse costing, full control of product quality and branding, less wastage of raw materials.

Cons: supply chain hiccup can cause higher TAT, requires reliable management and processes.

When purchasing in bulk, the first question is when is the right time to buy inventory stock. To determine the right time, there are three methods to use:

●   Order Pattern Method: This method of buying inventory stock involved making regular purchases of fixed amounts. The method is ideal for retailers who have almost constant sales figures.

●     Control Rhythm Method: This method suits retailers with a good grasp on demand and supply forecasts. This involves checking inventory at a fixed duration and buying inventory stock after adjusting.

●    Reorder Point Method: This method involves ordering the stock once it is below a certain level. It serves to be an ideal method of buying inventory stock for retailers who deal with fewer products. 

 

Now that we know what’s the best time to buy inventory stock, the second most important question to answer is, how much to order at one time? Before answering this, there are some things that we need to consider:

●      Demand Forecast, which constitutes the number of units sold over a given period of time.

●      Storage Costs, which is calculated by assuming the items in stock for the said given time period and interpreting the cost per item.

●    Ordering Costs are usually the total cost per order. It also includes logistics and other costs involved in making the purchase, excluding the actual order cost.

 Sometimes delivery can be delayed, so it’s imperative to keep into account the lead time between ordering and receiving the delivery. This helps to strikes a balance between demand and stockouts

How do you dispose of your excess inventory?

Excess inventory has indirect and direct effect on your business and proved to be a disastrous for the small budget business. For so many small businesses, excess inventory is the biggest balance sheet asset, and generally no small business can afford excess inventory. Through donations, returns, and disposal are options to getting rid of excess inventory, a better idea is to reduce inventory with sales and recover at least a portion of its original cost.

Increasing Reduction Disposition

Attempt first to clear slow-moving and excess inventory from stock at their best lowest price. Set a time period, for eg. one to about fourteen days, and offer a sale incentive, for example, the opportunity to win a prize in a raffle, a free lunch, or a couple of extra-long stretches of taken care of time to deals faculty who can move these things at their best price within this time. Next, utilize a superb cost lowered technique that begins by checking things somewhere near 20 percent to 80 percent and proceeds by dynamically expanding the markdown consistently or like clockwork.

Special Sales Events

Create an event for excess inventory items with the event of a superb sale such as an outdoor tent or simple sale. If there is no room outside, clear out and decorate a corner of the store and hold the sales event indoors. The objective is to redirect a customer’s focus and create an emotional buying solution, leading to immediate sales by evolving the buying environment. Though the reduction in price is a part of any special event, the better the event better catch the eye of buyers, the lower steeply you may have to decrease prices.

Online Sales Options

A small business that has a website can set up a clearance sale. For commercials that don’t have a website, now might be a better time to get one upgraded and running. Although setting up a website can include a substantial first cost, non-monetary benefits and the money it has the potential to offer can make a website a better business investment. A creative alternative for getting rid of excess inventory is to dispose of products on an online auction website.

Excess Companies

There are so many option to get rid of excess inventory is to contact third party who is interested in your excess inventory. So many offer an outright buy or consignment alternative, most general utilizing a non-penalty pullback contract enabling a small-business owner to cancel the contract without offering penalty fees. Buy individual product sales and website consignment sales will all instantly clear excess inventories. But the payment delivery and rates of return. The commercial owner will require to decide if the instant payment but the lower rate of return feature of a lot of individual purchase is preferred to waiting various months to receive the higher rate of return for products placed on consignment.

How do you sell excess inventory?

Tips to Sell Your Surplus Inventory Effectively

Surplus inventory happens to every retail business owner because you purchase too much stock of a similar type of product, after that the latest and the better model than before comes out. Or, it is not selling as fast as you have expected it to be due to this you got short of shelf space for new products. No matter how it arises, you need to liquidate your surplus inventory as fast as possible. Unsold inventory holds your major cash and you know the cash flow is the lifeline of your business.

Here are three killer strategy ways to get earn revenue from surplus stock; Sell it, bundle it, or remarket it.

 Run Unique Sales

Out of ten, nine is the score for this strategy as this is your best option is to sell your surplus inventory. But if it were that simple to sell it, it would not be exceeded. So, it is high time to talk strategy that really works for your business.

Consider selling unsold inventory at heavy discounts, approximately 35 to 70 percent. Of course, it will probably eat into your margin, but you have to move these products off your place. There are so many sale options you can go for to turn your excess inventory into cash Here are two sale options to consider:

 Clearance Sale

Consider clearance sales once a year. Attract customers with heavy discounts on inventory that hasn’t sold out in 3 to 6 months. Promote your sale with the help of an email. Create a clearance section on your website that offers discounts on unsold inventory as a permanent feature. 

Flash Sale

Comprehend the psychology of the customer and the sense of urgency to buy. Many times offering limited period discount and offer on products is an additional catch for shoppers to make purchases. A flash sale is the best way to earn quick cash.

Remarketing or Change Your Marketing Strategy 

The next strategy is remarketing or change your marketing strategy. Your slow-moving products may not be selling because of the way it is introduced in the market. Refreshing the marketing strategy can bring much difference. Here are some easy and quick changes you can make in your marketing strategy

 New Image, New Category

Freshen up your product pages with new photos and add lifestyle or action images. Try to enhance the quality, display your products from various angles. Also, make sure the product you are selling comes under the same category the user wanted to see in. Add a new landing page or new category to enhance its visibility and accessibility.

how to sell overstock inventory ?

Introduce Bundle Packs

Create a win-win situation for your business by introducing bundle offers. You can simply increase your average order value and sell your unsold inventory. The effective way to introduce this method by offering Bundle complementary products, bundle multiple units of the same product, or give combo offers on the slow-moving product with fast-moving products. The customers who are interested in the fast-moving products will view this offer as a great deal.

Buy and Sell Excess Inventory Smartly

Excessive stock is possibly associated with revenue loss owing to more capital bound with the buy or mere storage space occupied. Excessive inventory can be the consequence of over-delivery from the supplier or from poor management of inventory by a purchaser for the inventory.

When in reference to overstock or excess inventory in the form of consumer items in a retail operation, the term refers to products or items that have never been bought by the customer but that are termed as excess stock or inventory from Retailers or showrooms or Wholesalers or company and brand showroom.

Types of Inventory

Slow Moving inventory, Ageing stock, Overstock, or surplus inventory, is the result of kind of mismanagement of stock demand because of the factors includes over-buying, inaccurate projections, Seasonal Overstock, canceled orders, unexpected climate change, bad economy, or early or late delivery of items that have not been sold and that crosses the targeted consumer demand for a particular product.

Selling excess inventory is a serious problem, yet maintenance and management of it become even more difficult, but at Valueshoppe is the inventory liquidator place where you can easily buy and sell excess inventory.

Excess inventory is always discarded get rid of in the following ways: brands or original distributor/wholesalers/retailers,  returned to the manufacturer, liquidated to the companies that can resell it on the next or secondary wholesale or retail market, sold at a heavy discount to customers that are intended to buy the excess inventory, or sold to salvage companies which after that the processed metals and parts of the item that has significant value. 

Initially, the damage due to excess inventory is the quick exhaust of cash flow, and later the loss of disposable capital for investing. In case, you own a business, you are most likely to face the problem of having excess inventory.

How do you sell excess inventory?

How Surplus Stocklot Arises?

Surplus stock lot is the situation when a company has an excess amount of what is needed, no matter if it is due to product development or excess of products for the company’s own set limit.

●     When Purchase of Stock in Excess Quantity:

When the purchase of raw material was made to target the production of 800 T.V.’s per month but the actual production was only 650 T.V.’s, this result in the surplus stock lot.

●     When Purchasing bulk quantity is Unavoidable

It is very obvious that manufacturers do not order a small quantity. In such a case, the materials required for current needs should be kept and the excess should be disposed of.

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What is Online B2b Marketplace in India?

It is a known fact that purchasing/ buying/ producing is the most basic course of action for a business. To be able to fulfill your consumer demands timely, improves your credibility, and ultimately results in growth. However, surplus stock of unsold stock can turn out to be bad for your business as it leads to low stock turnover and also results in increased cost spent in managing it.

Changing trends, slow economy, overbuying, and seasonal overstocking are a few reasons that result in surplus stock, but reduced inventory and inability to find the right marketplace are the main reasons. Unsold stock not only restricts the flow of money but also leads to losses in terms of value and growth.

Try to visualize this, your inventory is not holding products but is holding cash. This cash generated with timely sales can result in the purchase or manufacture of more fresh goods; promote product sales and growth. Today it’s the age of the internet and businesses are making use of the digital platform for their needs.

Online B2B Marketplace in India that can Help You to Grow Your Business 

We provide one such platform where you can liquidate your surplus stock quickly. We are a one-stop wholesale online B2B marketplace in India for buyers and sellers. With us, the entire country is your marketplace as your location does not restrict you, and you need to focus on how to sell.

Business-to-business (B2B) eCommerce market has seen a gradual rise across the world, whereas in India it is still at the nubile stage. Experts predict that online B2B market in India will be worth Rs 45 lakh crore by the year 2020. According to a report by SME finance companies, this online industry is six times bigger than business-to-consumer (B2C) in India.

Excess Inventory Liquidation / Buy inventory Stock

The online B2B marketplace in India has enormous untapped potential for growth and presents an excellent opportunity for businesses.

Stock Liquidation | Clearance Stock

 It’s a known fact that purchasing/ buying/ producing is the most integral course of action for a business.

No wonder, we are a one stop destination for providing information on availability of the stock at a price that may provide unheard growth and profit. It is quite important for a retailer/ wholesaler to be able to identify the real time availability of the relevant stock but unfortunately, have to depend on few scattered sources. Our integrated platform for business associates, allows resellers to purchase a large number of mixed lot products direct from the source itself. Buyers get an option to either pick orders themselves from our distribution centers or have them drop shipped to their desired location.  Whether you’re a big retail/ wholesale set up, a regional chain, or even a flea marketer, we have a great source of inventory for all your surplus/stocklot/liquidation stock.