Excessive stock is always a big thing for a company to manage because it entails many costs. Don’t forget that production costs have already been spent. The next major thing is to manage excessive stock, which means that there has to be enough space in the warehouse and uptight security for its safety. However, what do you do if the warehouse runs out of space? Moreover, there is also a big risk of seasonal stock wearing out quick which means that something needs to be done urgently.
It is very imperative that some careful planning is done to manage that stock wisely. Most factories choose to apply the just-in-time technique. However, many still operate based on medieval timed techniques.
What to do then? Don’t worry; I’ll give you some valuable tips on managing and reducing the excessive stock:
Sell directly to customers
This is the easiest option to shrug off excessive stock from your warehouse. Do you have vendors and suppliers in the middle of you and your customers? If yes, then there’s no need to rely on them completely. Project the sales with bulk discounts on your website and publicize for customers. You will very likely be able to sell this stock if customers find a higher value for less price.
Scrap it
What is the nature of this stock? Is it the result of production in batches? If it is not necessary, then simply dump it. Seasonal stock is the most fragile in terms of its longevity. If you have already achieved the break-even point with production and can easily suffice your profits with the stock that is already ready then just shrug off the excessive production by wasting it.
Store it somewhere else
Have you run out of warehouse space for excessive stock? Then do not worry. There are companies that offer safe storage of your stock at economical prices. You can place your stock in Perth storage center if you believe that there’s no personal space to put it in. Storage centers have top-notch facilities for managing excessive stock.
Trade with competitors
You surely wouldn’t be the only one operating a business in a particular genre. Your competitors might be looking for the stock that you have. If you have developed good relations with competing partners, then the sound idea is to sell the stock to them. Moreover, you could also offer bulk discounts on purchase. However, if you sell on the production cost, then still there will be no loss. Instead of earning nothing by dumping the stock, it is better to at least break even in terms of cost.
Recycle it
Instead of scrapping the excess stock, it is better to recycle it. See if it can be broken down and used again. However, the nature of the stock will reflect upon its ability to get recycled. Don’t decide recycling the stock all of a sudden. Consult professional advice before you take the concrete decision of breaking down fresh production again.
Give it away
Is your company user-friendly? Have you don’t philanthropic work in the past? If not, then this is the time to do it. Social service is very important, and companies that work for the benefit of society are highly valued by customers and the general public. However, it is first important to relate the nature of the stock to whom it can be donated to.
Conclusion!
It is better that stock must be properly taken care of. Excess stock is always at risk because it is a product of the investment of the company. No business aims to incur a loss which is why it is important to do careful planning of the production.
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