Dead stock can be a chilling word for business owners. This is because it is that part of the stock which just would not sell. An intelligent business minded person will carefully analyze the points which can result in such situations and thus work towards reasons to avoid such issues. Dead stock situation may arise due to the following reasons.
- Wrong inventory management of the company. Business owners try to divide their stock into two parts. One they maintain to keep the flow of the stock as per the demand of the customer. The other part of the inventory is kept as reserve to meet the problems which they may for see. But then if anything of this sort does not happen, then the dead stock problem arises.
- Defective product can also lead to dead stock because defective product just would not sell.
- Wrong marketing activity or tool can lead to such situations as well. Unable to target the correct audience is another major reason which can result in dead stock.
But then it is important to understand the specifications of such problems and then look for ways to avert the same.
- Use a good inventory management staff who can easily manage the difference between cycle stock and reserve stock. They should immediately convert the reserve stock as per the changing market trends.
- These days generally the retail stores have multiple chains in different locations. The communication between the inter store should be good which can help in the transfer of stock to another location where it sells at a faster rate.
- Have a clear agreement with the supplier that if the excess inventory is not used, then they will accept it back. This will help to maintain a running stock and avoid dead stock.
- Keep a track of the market trends and understand the demand for products. Following the pattern, invest in the inventory. The purchase pattern of the company can also serve as a great tool to understand the trend and order the stock accordingly.
- Give lucrative deals to the customers from to time to time. This will keep the customers happy and give them reasons to visit your store. Create combo offers wherein you can combine items and put it on sale. This is an effective inventory liquidation tool.
- Indulge in social media marketing as these days customers are hooked to the online locations.
These are few effective tricks to keep dead stock at bay.