Excess stock in fashion business is a nuisance. Apart from taking up useful space in your store, it ties up money and keeps you from reinvesting in other things that’d yield immediate profit.
Paying close attention to your sales and inventory so you know how fast or slow each product is moving is important. As soon as a product passes a certain time threshold, you have to treat it as excess stock and take the measures I’ll explain in this post, to profit off it before it becomes too late.
Taking note of your inventory and sales also helps you prevent excess stock. This way, you’re not realizing too late and desperately trying to get rid of an obsolete product when no one wants it. This will help you make better production, purchasing or marketing decisions. The goal is to not get stuck with excess stock.
So in this blog post, I’ll share how to prevent having excess stock and how to profit from excess stock if you already have it. Because you can’t throw them away, so you might as well use them to your advantage.
How To Avoid Having Excess Stock In The First Place
We all know what they say about prevention being better than cure. It’s the same with excess stock. The best way to deal with excess stock is to avoid it from the beginning. You can avoid excess stock using the following tips:
- Be strategic about placing orders
Order lower quantities for non-basic styles. By lower quantities, I mean between 4-6 pieces. This way, you are testing the market. If it sells fast then you can order more and if the market don’t absolutely love it then you are not stuck with excess stock. If your boutique is really small, then you could go for 2-4 pieces. I recommend going for a lower quantity because it will be easy for you to sell a few even if the market doesn’t absolutely love the product.
- Observe and interact with customers and improve your stock
You have to know what the customer needs and provide it if you want to make sales. Don’t buy a product because you love it, buy it because your customers need it. Even if you feel like they have a poor sense of fashion. Ask them what they want and sell just that. Don’t buy what you think they should want and try to convince them to buy it. It will be hard.
- Forecast demand
Follow trends and seasons. Look through sales history. Talk to customers and stock inventory that move quick at a particular season. This is more or less an educated guess. If you have no business records to look at, then you should be absolutely sure before you make this move.
- See if your suppliers can deliver directly to your customers
You might want to consider this option. This means you’ll avoid holding inventory altogether. I know a business that does this. In fact, this is all they do. It is an Instagram shoe store. They have no merchandize of their own. They partner with brick and mortar stores that actually have these shoes in stock. Then they market it on social media as their own. When someone makes an order, they accept payment, take out their cut, pay the store for the shoe and order them to supply their customer. This allows them to showcase and sell hundreds of shoes on their Instagram shop without physically stocking them. Everyone wins!
What If You Are Still Stuck With Excess Stock?
I pay close attention to products at Desire1709 and take measure to prevent them but still, excess stock problems sometimes turn up because of things beyond my control. Factors like recession, sudden change in trending items (fashion is fast paced) or incorrect demand forecast. These are issues beyond our control and we still have to find ways around them.
Here are 6 Smart Ways to Profit from Excess Stock in Your Fashion Business
1.) Bundle Products Together
This way you group 2 or more products together and offer a slight discount to encourage sales. Bundling products together may reduce your profit margin for each product but it will greatly increase the rate at which you get rid of excess stock. Some of the ways you can bundle products to get rid of excess stock include:
- Bundle your slow-moving products with faster-moving ones
If a product isn’t moving as quickly, pair it with a product that sells faster. This way, the customer is more enticed to buy and you get rid of excess stock.
- Bundle multiple units of the same product
Group multiple units of the same product and sell them as a package. For example, Instead of selling one leather belt at 1000, you could bundle 6 different colored leather belts and sell them at 5,000. This trick however works best if you’re trying to get rid of small to medium-sized products.
- Bundle complementary products
If the excess the stock complement other items in your store, you can add value to both products by bundling them together. For example, if you have a slow selling mules in your collection that go well with your fast selling maxi dress, you could have a promotion where you get a free pair of mules when you purchase a maxi dress.
2.) Re-market From Scratch
When an item isn’t selling fast or selling at all, the problem may not necessarily be the product itself. Sometimes, the problem may be how you’re marketing it.
First of all;
You need to re-brand it. Fresh looking images can have a huge impact on shifting excess stock. A great image can suddenly help your target customer’s eye and convince them to buy. So dry clean them if they are dusty, take new images of your products, and replace worn out price tags.
Then position them in a different areas of your store. More likely in areas that are frequented by shoppers, switch up their shelf arrangements. You need to make it look new and fresh for your staff and customers.
Side note: You should only re-market a products that you think could be a good seller, and your current images or marketing efforts aren’t doing it justice. This is because re-marketing cost money and will invariably increase the cost of the product. You don’t want to spend money and still be stuck with an obsolete overpriced product.
3.) Send Excess Stock To Bloggers/Influencers
You could use excess stock in a batter collaboration with influencers. A mention/review from an established fashion blogger/influencer will potentially give your excess stock the boost it needs to move quickly. If you have multiple units of the same product, you could send them a unit and watch them drive traffic to the remaining units in your store.
4.) Strategically Offer Discount on Excess Stock
Discounting your excess stock is one way to go. You could do it by running a clearance sale, flash sale, pop up shop etc. I find that making the discount time bound works really well. Try to weave scarcity into your marketing and the fear of missing out on the one time deal might just convince any customer sitting on the fence to buy.
Make your discounts as little increments. Don’t start with a 50% off. Start with 20% off and build from there. The advantage of holding clearance sales or flash sales is that it attracts a bigger audience and helps you gain new customers in the process.
Side note: Offering discounts too often in your business can be detrimental. It can train customers to hold off buying from you until you discount your items and make little or no profit. You don’t wait to train them this way, do you?
Although offering discount help to get rid of excess stock, it may not be the right call for you. If you read my post on pricing, you’d understand better. If you are selling to people of a certain class, then offering discounts will make them feel like you are not worth their money. Remember they buy because of social status and perceived value. You might want to try another strategy and stay away from discounts.
5.) Use them For a Giveaway/Incentive
A giveaway creates a new buzz about your excess stock and can significantly improve customer demand for it. That’s not all. Giveaways can also help you build up your social media following.
Giveaways/incentives however, work best for cheaper products. If a product is tough to sell, use it as a giveaway or incentive instead. For example, you can offer it as a “bait” to get people to increase their basket value (i.e. Spend 10,000 or more and get a free dress-shirt)
6.) Donate Excess Stock to Charity
Donating to charity might seem like you are losing money. But look at things from a brighter perspective. You’d not only be helping people but gaining free publicity and humanizing your business. This is a good cause you’d want your brand to be associated with.
I hope you found this post helpful in dealing with excess stock. You can see that excess stock can become profitable, get you new customers and make your brand look good.