Obsolete, dead inventory plagues most small businesses, especially growing businesses that need cash. Old product lines, failed concepts or too much before good inventory can weigh on your balance sheet and slow down investment in future opportunities. You may be tired of presenting your dead inventory to customers and ready to send it all to the landfill. However, one great way to get cash back is to turn your warehouse into a makeshift store and hold a warehouse sale. The cowboy knows that at the right price, the old cow can still put much needed money in his pocket.
To have a successful inventory sale, you need to do three things: advertise effectively, prepare thoroughly, and manage the sale actively.
Opening the warehouse to the public creates a new shopping destination that is unknown to consumers. Even if you price everything in dollars, you won’t sell much if no one knows about the sale. Here are a few ways to get the word out to salespeople:
- Flyers – were put in cars and handed over to friends. This is the most cost-effective way to start advertising. Focus on the parking lots of stores related to your products. Also obey all laws and respect company rules.
- Craigslist – Post some of the more expensive ticket items you want to sell so interest will bring people to you.
- Newspapers and announcements – Depending on your target audience, this is still a great way to reach people effectively.
- Facebook – even if you don’t have a company Facebook page, encouraging employees to spend time at work sharing with their friends is an effective crowd-builder.
- Neighboring companies – Visit neighbors, sellers and customers and tell them about the sale. Many people come to lunch to see what you have to offer.
- Signs – Together with local businesses and neighbors, putting signs and arrows around helps to arouse curiosity and customers. Just like garage sale signs guide people to a destination, you’ll want to place multiple signs to direct people to your warehouse that may be hard to find otherwise. Billboards are an added bonus if the budget allows.
- Email Blasts – If you have an email list, this is the perfect time to use it. Offering incentives through a blast can help build loyalty to the company even after the sale. If you don’t have an email list, use inventory sales as an opportunity to create one.
- Mouth-to-mouth – Ask people who buy from you to tell others about the sale. With this, you can get many more customers.
- Radio – If you have a budget, usually several thousand for an effective campaign, radio is a great way to get a bunch of people. Start advertising about 10 days before the event and increase the frequency of ads before the event.
- TV – Although ads can be expensive, local news stations can have several options to offer sales at a lower price.
A successful inventory sales marketing campaign, especially the first sale, requires 10-20% of how much you want to sell. If you only want $10,000, a budget of $1,500 will do. If you want to unload a lot more, you’re going to advertise more.
It is possible that your warehouse is not designed for consumer purchases. Turning a warehouse into a store helps consumers feel more comfortable and spend more. Preparation requires two parts: (1) safety and traffic flow and (2) pricing and sales.
Safety and traffic flow
Some of your customers probably bring children with them. This is paramount to remember when planning a sale, as a typical warehouse has many dangers for six-year-old boys. To protect your customers and manage inventory that is not part of the sale, you need to seal off areas of your inventory that you don’t want everything to touch. Some orange Uline safety fence works well. You’ll also want to post signs to answer common questions you hear: “Do you have restrooms?”, “Do you accept returns?”, “Do you take credit cards?” or “Where to checkout?” ” IKEA does a great job with signs to answer customer questions, so use IKEA as an example.
Pricing and sales
An extremely low price is the key to moving your dead stock. Remember, no matter how much you paid for it, your products are only worth what the consumer will pay for them. At least 75% off an item’s retail price is a good place to start, but you’ll likely have to cut some items much more. Let the cliché “Stack it Deep, Sell it Cheap” guide your pricing decisions. Remember, inventory sales are not about margin; inventory sales are all about raising cash from dead inventory. If for some reason they generate a margin, you should consider opening a retail sales channel.
Whether it’s a black marker on cardboard or a beautifully printed graphic, large signs work great to let customers know about your incredible prices. Showing multiple prices usually helps: Retail Price $79.99, Sale Price $29.99, Warehouse Sale Price $8. This technology helps customers know how much value they are getting.
Work with your accounting department to figure out how to include sales tax in your prices and sell everything in a round number ($1 or $3 instead of $0.99 or $2.97). Although 99 cents is less than the psychological barrier of one dollar, handling coins at the register helps people cope much faster than counting money.
Let people fill in miscellaneous loose items or whatever you have tons of. This creates excitement and sells products that you don’t sell much on their own.
While many people come to a warehouse sale expecting to dig through boxes, bins and pallets, the easier you make it for customers to access products, the more you can move. Stacking six pallets, placing a slide sheet on top, and then arranging the items is a great way to bring items to a place where consumers can easily reach them. In addition, wide aisles reduce congestion – especially for mothers with strollers or customers loading your products.
You’ve gotten the word out about your inventory sale and you know hundreds are going to come. You have also spent hours with your team preparing everything with beautiful signs and affordable prices. You’ve done a great job so far, but when the first customers walk into your warehouse, the bull run has just begun.
The key to moving the most inventory – and generating the most cash – is to have someone present throughout the sales process to make the pricing decisions. You should have a big black marker in your pocket and use it often. Know which products you absolutely want to get rid of and lower the price until they start moving. If five dollars is two, try three dollars – or buy one for five, get one free. However, be strategic with your pricing, because selling two items for $5 will make you more money than selling each individual item for $3.
Another reason to be on the floor is to negotiate. “Interested in that old water cooler? – make me an offer” – and accept almost anything. Talk to customers and answer their questions. With prices this low, selling is very easy, and usually just explaining the price makes the sale.
Inventory sales are also a great opportunity for your product development team to talk directly with customers. Consider launching future products at a deeply discounted price to see which ones sell. Talk to people and learn what you can do to avoid future inventory dumping. In addition, the presence of people who can explain all the features and benefits of your product and even give personal recommendations will help convince many people to buy more.
After the sale is complete, ask liquidation partners to take whatever is left. This will not only help you save a paycheck on cleaning, but also clear everything so you can move on. At a loss, selling hurts, but it puts cash in your pocket. The company survives the loss of net income, but the company easily drowns in a cash flow dam that inventory sales can break.