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Tuesday, March 16, 2010

Is Dead Inventory Harshing your Mellow? Tips to unload it....fast!

Slow moving inventory gets in the way of profitability.  We have all been there---we got excited about a particular product and ordered it.  Lots and lots of it.  Unfortunately, the demand for the product did not meet our expectations and so we are left to carry the burden of the surplus merchandise.  Unfortunately, too many retailers simply leave dead stock on the shelves, rationalizing that it will sell.  Eventually.  Except that it doesn't.  Customers get sick of seeing it on the floor and there is so much money tied into the loser stock that the retailer cannot purchase new product. 

What is the Crafty Retailer to do?

Quit smoking the HOPIUM and get rid of that ball and chain!  Sell what you have now so that you can buy what you want later!  Let go of any emotional attachment you have to your stock---it will only muddy your focus.  Take a cold, hard look at the numbers---they do not lie.  If a product is not selling in a reasonable period of time, you need to unload it.  Sitting inventory costs you money.  Do you have inventory hiding in a stock room, under a table, in a closet?  Those are the worst offenders of all because they never even had a chance!  It costs approximately 2% per month to maintain inventory on a shelf.  No one likes to sell a product for less than it costs, but it sure beats losing all of your investment.  Craft trends come and go...your inventory has a shelf life.  A little cash now is better than no cash later....get what you can for it and get it out the door.

Determine which inventory items are slow movers by evaluating inventory turns.  After all, if you don't measure it, then you cannot manage it, so KNOW YOUR STOCK!  A product that has not sold in six months is not stock you want to maintain.  Take an hour this week to make a list of surplus stock and make it your mission to get rid of it in the next 30 days.  You can do it!


Start thinking outside of the box to come up with promotional events to help you do the dirty work:

Weekly Craft challenge:  Charge a small sitting fee and organize a weekly craft challenge.  You GIVE AWAY the materials (er...dead stock) and your customers have two hours to make something fabulous.  Take photos and blog about the fun.  Vote on a monthly winner and give away a small prize.  Build community while unloading the yucky stuff.  Win-win.

Grab Bag with a twist:  Use the excess inventory as the basis for some grab bags.  Put a "golden ticket" in a random bag and offer a nice prize for the holder of the ticket.


Treasure Chest:  Put the untouchables in a treasure box by the register.   Allow customers to pick a free item for every $10 they spend.

Gumball Machine:  Patty Strong of Mountain Beadworks knows that Beads fit very nicely into gumball machines.  Who can resist a handful of beads for a quarter?


Scratch off Tickets add excitement to the sale:  Give a scratch off ticket to customers who buy select [aka "LOSER"] product.  You can make your own customized scratch off tickets to add to the fun.  Check out the awesome tutorial from Artmind.


Get your employees focused on the task, too.  Offer incentives to get employees focused on liquidating the slow movers.  Make it a game...check out the sample "Employee Bingo" game...simply modify the squares to reflect your goals.

Discount it.  Sales and markdowns are always a viable option, but remember that today's consumer is bombarded with sale messages.  You need to discount with creativity and humor to get noticed.  Consider putting the duds on a table and selling it in an unusual manner.  Fat quarters by the pound, beads by the handful, etc.

It will take some time and some attention, but unloading excess inventory is like spring cleaning with a cash bonus!  Do it now, do it aggressively.  You will feel better!

Other news:
Last week I blogged  about bumps in the road and shortly thereafter I  hit a pretty big bump.  Rosie, my three year old dog, was diagnosed with a very aggressive, high grade cancer.  The vet oncologist feared that the cancer had spread and was talking about a 2 to 6 month life expectancy.   Rosie is a funny looking little mixed breed dog whose parts never fit well together. Nonetheless, I see her with my heart instead of my eyes and she is perfect.  We have been on pins and needles waiting to get the results of her latest lab work.  Yesterday I learned that the disease was confined to her leg.  She will be a three legged dog, but she will survive.  The sun is shining, the birds are singing!  Life is good....


....and I want to celebrate!  I will draw a name from those who comment on the blog during the month of March.  The winner will receive a package of  fiber and crystal goodies with a wholesale value of $100.  Start talking!

18 comments:

  1. Congrats on the (mostly) good news about Rosie!

    I really enjoy your writing. It has been very helpful for me as I move toward getting my own shop open in Houston, TX.

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  2. Thanks for your compliment and warm wishes. A new shop? How exciting! What kind of shop?

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  3. I am so glad to hear Rosie is going to be ok. So many people treat their pets as something to be discarded when they no longer want to deal with them.

    I will celebrate with my Daisy (who is a shelter dog) tonight and we will toast Rosie with an extra treat!

    Thanks for the great tips on surplus stock. I really like the beads in a gumball machine :-)

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  4. Great ideas, I love the candy dispenser idea, I've got a 50yr supply of a lot of things, boy does it feel good to reduce it to a 20yr supply.
    Great ideas, and I'm going to cleaning out the barn----hhh

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  5. Homer:
    I would love to spend a few hours in THAT barn--lots of great treasures, I am sure! By the way, I love your new designer pendants.

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  6. Myra:
    I had a Daisy, too! Such a classic, sweet name for a pup. Rosie's surgery is tomorrow...wish us luck!

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  7. Exciting, and terrifying, but mostly exciting!

    I'm gearing up to open the Texas Art Asylum, which will sell cool discarded stuff from businesses and regular folks for creative reuse. (Sounds like I need to make a trip to Homer's barn!) Hoping to be open in May.

    It's not a new concept, just new to Houston.

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  8. That IS exciting and your timing seems perfect...these days it is all about re-use, recycle, re-purpose! Down economies come with awesome opportunities. Good for you. Please keep me updated on your progress.

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  9. Pat, best wishes...fingers crossed...That Miss Rosie will come through her surgery with flying colors! She is such a cutie!

    I'm donating some of my old stock to Beads of Courage...an organization that distributes the beads to various hospitals to help kids through various treatments and surgeries. I may not be selling them (I've tried just about everything & even gave bunches away at the holidays as "bonus" beads with purchase) but still have some sitting around. I know that they will be going to a great cause!

    Michelle

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  10. Beads of Courage is a great organization that can certainly use the resources. Another beady charity for folks to consider is Bead for Life.

    Thanks for your warm wishes, Michelle. I just took Rosie in for the surgery today---another day on pins and needles!

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  11. so far my favorites are "harshing your mellow" and "quit smoking the hopium".

    thanks for the column. i learn a lot.

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  12. Thanks, Andrea. I love YOUR idea of promoting beading as a way for girl scouts to earn their badges! Great marketing--you go, girl!

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  13. Hey there! I have one of those dogs too! Mine is called a "Dauchs-wa-wa" or a "Chiweinie". His name is Tucker. He looks like a black/tan daughshound with too short of a body, too long legs, and a curly chijuajua tale. I call him "genetically confused." Poor dog. He's an awful lovey dog and I'm glad to have him. I'm very sorry about your baby. She's adorable. The good news is that you get to keep her...that's the very important good news. Keep up the happy blogs, Pat. It's always great to get your newsletters and new blog!!!

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  14. Cheryl:
    "Genetically confused" is perfect...just don't tell Rosie---she would never believe you. I just spoke with the vet and she is doing well. Heavily medicated, but she has even been walking a bit. My daughter and I are going for a visit after school and I cannot wait!

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  15. Yes, indeed! Rosie is coming home today and I can't wait!

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  16. Well, Hot DOG! This is great news in a spot of rotteness. I read the later posts and saw the vicious scar and winced. Still, you still have her and she seems like a fighter. You do, too.

    We are going to get a dog this summer. Funny how the world works. I thought it would be chickens. Husband is graduating and looking for a job. I thought we would wait for the kid to turn ten or eleven, but pre AAAAAUUUUGH-dolescence seems to be testing the waters here. The idea was a companion to get her through puberty and then to get me through her going to college. Oops. I can't wait.

    Thanks for sharing your news!

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  17. Don't give up on the idea of chickens! We LOVE our hens. The rooster is a mean SOB, so I am not so wild about him. Your planning is spot on regarding the timing...the dogs were great for the kids when they were younger and got me through my boys going away to school and my oldest son's recent move across the country!

    PS...I enjoy your blog!

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