Seven sales strategies to clear surplus stock and boost cashflow

If you want your start-up to succeed, knowing how to manage your stock is important.

Having enough stock means you can always meet customer orders but having a surplus could strain your finances.

Managing your inventory correctly is key to keeping your finances healthy and ensuring your business can grow.

By managing your stock levels well, you could reduce waste, improve cash flow, and more effectively meet customer demand.

If you have too much stock, don’t worry – read on for sales strategies to help you clear it.

Understanding surplus stock

Surplus stock is when you have more inventory than your customers want.

This could be a financial burden and cause you to miss out on business opportunities.

Knowing why overstocking happens can help you avoid it.

Here are a few common reasons why businesses end up with too much stock:

• forecasting errors – predicting sales incorrectly could lead to buying too much stock
• changes in demand – sudden shifts in what customers want or market trends could leave you with surplus stock
• supplier deals – buying in bulk due to attractive discounts without checking actual customer demand
• seasonal fluctuations – misjudging patterns of demand that result in leftover stock.

By recognising these reasons, you can manage your inventory more effectively.

The impact of surplus stock

What does having surplus stock mean for your business?

Cash flow problems

Having too much stock could cause cashflow issues, as your money is tied up in unsold items instead of being available to invest elsewhere.

This could make it harder for you to seize new business opportunities or have cash freely available to deal with unexpected costs.

Learn more about how to spot cash flow problems.

Higher costs

Holding extra stock could also mean higher storage costs, as you might require more storage space or need to pay more for utilities.

It could also lead to higher insurance costs, as you need to cover more items.

Potential losses

You could lose money if your surplus stock becomes outdated or spoils, as it may be hard to sell and recover your costs or make a profit.

Whilst all of these are valid concerns, don’t worry too much if you find yourself overstocked – it is a common issue for many businesses.

We’ve come up with seven ways to shift it and resolve the issue.

7 ways to clear surplus stock

1. Discount sales and promotions

One easy way to sell extra stock is by offering sales or special deals.

Organising seasonal promotions and clearance events can quickly move your products.

To make these appealing, consider announcing them as close to the start date as possible and say how long they will last to create a sense of urgency.

You could promote these events through email campaigns, social media posts, and in-store signage to maximise reach and engagement.

2. Create bundles

If single items aren’t selling, consider offering more value by bundling with other products at a reduced price.

For instance, if you have too many copies of a book in your online shop, sell it at a discount when someone buys another related book.

Alternatively, you could sell them as a package deal.

You can also create themed bundles during festive seasons to make them more appealing.

Read about how to increase sales on special occasions.

3. Implement minimum orders

Setting a minimum order requirement could help you clear stock by encouraging larger purchases.

You could offer a discount or free shipping for orders that meet the minimum threshold, or that exceed a certain number.

This strategy could help move surplus stock and increase average order value, benefiting overall sales.

4. Use online marketplaces

Consider listing surplus stock on platforms like eBay, Amazon, and Facebook Marketplace to reach more buyers.

Using clear images and detailed descriptions with the right keywords could help improve visibility.

Also, consider setting competitive pricing to attract more buyers.

You could monitor the listings regularly to adjust pricing or promotions depending on demand.

5. Liquidate

Consider selling your extra stock at a reduced price to clear space and improve your cash flow.

You might sell to other businesses, wholesalers, or through partnerships.

Networking in your industry could help you find potential buyers interested in your surplus stock.

6. Hold promotional giveaways

You could also use surplus stock as promotional giveaways to attract more customers.

Running competitions or offers that encourage people to engage with your brand on social media and in-store could help you clear the surplus stock.

It could also lead to increased brand awareness and customer loyalty.

To make them truly effective, consider aligning the giveaways with your marketing goals.

7. Donate and recycle

Instead of storing or wasting surplus stock, consider donating it.

Your donations could help charities and local groups, strengthen community ties, and improve your business image.

Donating to registered charities could also provide tax benefits.

If donation isn’t possible, explore recycling options to give your items a new life.

Inventory management best practices

Prevent overstocking in the future with these ideas to help you manage your start-up’s inventory.

Demand forecasting

Using demand forecasting tools and techniques could help prevent future overstocking.

These software solutions analyse past sales data, market trends, and seasonal patterns to accurately predict what stock you need and when.

You could regularly update forecasts to reflect changes in consumer behaviour and adjust your inventory accordingly.

This proactive approach could help you buy the amount of product you need to meet demand without overstocking.

Software such as Xero or Sage can be helpful for inventory management.

Just-in-time inventory

Adopting a Just-In-Time (JIT) inventory system could significantly reduce the risk of overstocking.

JIT means you only receive goods when they are needed in the production process.

This could lower storage costs and reduce waste.

Implementing JIT requires you to have strong supplier relationships and reliable delivery schedules.

Potential benefits for your business include improved cash flow, reduced holding costs, and a more efficient supply chain.

Read about how to supercharge your supply chain.

Avoid supplier pressure

Remember that your suppliers may also use strategies such as deals and discounts to encourage you to buy more stock than necessary.

While bulk purchases may often seem cost-effective, they could lead to overstocking.

Stay strategic by evaluating each offer based on your projected demand and current stock levels.

It could be helpful to prioritise long-term inventory health over short-term savings to maintain balance.

Regular inventory audits

Conducting regular inventory audits can be essential for maintaining optimal stock levels.

Frequent reviews could help you spot discrepancies, adjust stock levels, and make informed purchasing decisions.

Inventory management software could streamline the audit process and ensure accuracy.

The software could help to prevent overstocking by providing automated alerts and real-time insights into the status of your stock levels.