7 Ways to Move Overstock Inventory

7 Ways to Move Overstock Inventory


Overstock inventory costs your business money every day it sits on the floor or in the stockroom. Determining how much inventory to carry and when it’s time to look for new strategies to sell overstock are critical parts of growing your business.

So what do you do when you have too much merchandise? Here’s what’s working right now in inventory management — and how to ensure you keep overstock under control over the long term.

Understanding Overstock

Overstock inventory is inventory that, for whatever reason, you just haven’t been able to sell. Perhaps you misjudged the demand for a product, or maybe manufacturing quality issues spurred a flood of returns.

Inventory management can be complicated. You need to order products in advance and quickly adapt to market changes to control your inventory and its costs. Finding ways to clear out overstock isn’t just cost-effective — it’s mission-critical. An overstuffed inventory can be a big burden — profit drops while storage and maintenance costs escalate. And too many stale products means too little space to bring in fresh items.

7 Ways to Move Overstock Inventory

If your stockroom runneth over, here are a few tips and tricks that can help you move your overstock.

1. Develop inventory strategies

The best way to deal with overstock is to avoid having it.

Developing a plan to keep your inventory from bloating involves tailoring sales projections and purchasing plans to your needs. Joey Clark, stylist and owner of the inclusive Philadelphia-based clothing retailer Kin Boutique, doesn’t have a lot of room in her store, so she’s careful about what she buys — but even then she still sometimes ends up with extra.

“As a small store with only 750 square feet of retail space, it is imperative that we are mindful of our inventory and why we tend to only buy smaller units of a piece,” she says. “However, it is not always a perfect system, and sometimes we are left with an excess of a certain style.”

For many businesses, developing inventory management strategies involve:

  • Using technology tools to forecast demand
  • Introducing an inventory management system
  • Buying in smaller lots and developing agile supply chains to support just-in-time stocking
  • Building regular feedback loops into management plans to examine inventory that’s getting stale and discount it

Fashion Designer In Studio

2. Get creative with your promotions

Sales can get overstock moving, but many small business owners find success looking beyond standard promotions. Here are a few creative solutions that can be helpful.

  • Get social. Clark has used Instagram to build a community and create unforgettable shopping experiences, even during digital-first times.
    “We had a lot of overstock in denim and dresses, so we would do things like flash sales on our Instagram account and online shop to move pieces in these categories,” she says.
    Clark suggests wrapping promotions into your broader social media strategy. Initially, the Kin Boutique team created a dedicated account for sales items. It boosted sales, but managing multiple accounts wasn’t worth the extra effort. Taking a streamlined approach to selling overstock inventory on social media proved a bigger payoff.
  • Hold blowouts. Physical restrictions and occupancy limits have limited big in-store shopping events. But you can make the most of your outside space (if you have any) or introduce big sales as restrictions lift. Be strategic with your discounts, and be careful not to devalue your brand or products. But customers love a good deal, and promotions can be an effective way to move merchandise — especially in today’s economy.
  • Bundle products. Individual products might not sell on their own, but strategic bundling can give overstock new life. If you operate a gift shop, bundling candles, soaps and other fragrant personal care items together at a discounted price can make the bundle more attractive than each item. Bundling can work as an ongoing strategy or in connection with promotions to help move older stock.

3. Donate it

Donating your overstock inventory can yield myriad benefits, notes Gary C. Smith, president of the nonprofit National Association for the Exchange of Industrial Resources.

Donations usually yield tax deductions, for one. But overstock donations can be a cornerstone of your corporate social responsibility program and can help you forge deep relationships with your community.

NAEIR, for instance, accepts excess inventory from businesses and distributes it to member schools, churches and charities.

“Whatever it is, chances are, some of our nonprofit members can put it to good use,” Smith says.

Donating items to local partners, nonprofits and schools can also be an effective way to move overstock and cultivate community relationships.

4. Pivot to new products

If you assemble products in-house, you might have a glut of component pieces. If so, developing new products can be a smart way to sell overstock inventory.

“One thing we do is pivot by creating a product geared toward another industry — ideally, one that orders in larger volumes so we can move the material quickly,” says MattressInsider CEO Jonathan Prichard. “For example, we market our mattress encasements, or six-sided mattress protectors, for home use, RVs, trucks and sleeper sofas. If we have an overstock of mattress protection materials, we could pivot within days to create products for, or market to, hotels, universities, prisons or the military — all of whom use mattress protectors and also tend to order in bulk.”

5. Work with a merchandise liquidator

One fast and easy way to sell overstock inventory is by working with merchandise liquidators. These companies purchase your inventory at a discount and resell it. Others will resell your inventory for a commission.

When choosing a merchandise liquidator, keep these things in mind.

  • Always research a liquidator’s reputation and terms — especially if it’s your first time working with one or if you found them online.
  • Be aware that liquidators will cherry-pick the best merchandise, so it might not be the solution for everything you’re looking to unload.
  • Be realistic about price. You might recoup expenses or minimize losses, but you’re unlikely to turn a profit when working with a liquidator.

6. Be transparent with customers about what’s driving sales

Don’t forget the power of an honest conversation behind what’s driving an overstock sale, Clark says.

“There is a lot to consider when dealing with inventory overstock,” she notes. “If the fit is an issue and the vendor won’t allow a swap, we are usually quick to mark it down and be honest with our shoppers as to why it is on sale. I think transparency is key when dealing with overstock merchandise. Our customers appreciate it, and it doesn’t hinder their buying; it just may take longer than normal for a piece to find its forever home.”

7. Acknowledge the impact of the changing landscape

What worked for selling overstock before the COVID-19 pandemic might not work now. In fact, adapting to a new business model can contribute to overstock. Remember that when you’re planning your buying strategies.

“COVID and the recent storms in Texas, the Midwest and other places have put a monkey wrench in the supply chain,” Prichard says. “When things become unpredictable, we’ll order whatever we can get a hold of from multiple suppliers so we can maintain our normal lead times. That sometimes can lead to scenarios where we have excess inventory that needs to get blown out.”

Overstock and the Bottom Line

Overstock inventory affects your bottom line. Implementing best practices to avoid or reduce it and tapping into a wide range of potential solutions for selling it can help you free up space and capital.

Don’t let your business get dragged down by overstock inventory. With a bit of creativity, you’ll be well on your way to making room for the latest offerings and trends.

Need resources to help implement a solution, such as inventory tracking software, or fund a social media sales push? A small business loan can help.