As mentioned, having dead-stock in your warehouse eats away at your money which can leave you with limited funds for other areas of your business such as; marketing, product development, or other sales opportunities. When trying to grow and scale a business, it is absolutely crucial that you invest your money into the right things.

Dead stock can become a huge issue if the stock has expired since you cannot sell expired stock to customers. If it is expired, the option to donate is removed. You sometimes have the option of incentivising customers to purchase dead stock by offering it in bundles, but again, if it is expired then this is not an option. Your only option at that point is to pay to have it disposed of, which of course comes as your expense. If the dead stock is not expired, you may still struggle to sell it since the value of the products may decrease over time which creates an even lower demand.

Forecasting is the process of calculating what your inventory demand is at any given point. Forecasting uses historical data, so if this is inaccurate then your end calculations are likely to be inaccurate. This can lead to having too little stock, or in this case, it leads to having an excess amount of unmoveable stock. If you’re just starting out, you likely won’t have enough historical data, however its best to not over estimate until you can get a better understanding of your demand levels, and then you can adjust your calculations accordingly.

Regardless of the sector or market you’re in, you’ll find that there will always be competitors offering the same, or similar products to you. If you find that the demand for your specific product is low, but there is a high demand for competitor products, this could be because they are offering something that you aren’t. In most cases, the deciding factor to shop with you or with a competitor is down to price. If customers cannot see the value for price in your products, but they can see it in competitors, then they are likely to shop with them. This then leads to you having deadstock.

So its important that you thoroughly research the market and your competitors before deciding to order a large volume of stock.

Marketing is a crucial component for any business, but particularly eCommerce brands. How will anyone know about your products if it is not marketed properly? Failure to market and promote your products effectively can lead to your competitors getting all the business, meanwhile you’ll be left with deadstock. We recommend finding your target market, researching and understanding their behaviours, and promoting your products across as many platforms as you can. You can also use things like influencers to promote your products.

As mentioned, you cannot donate dead stock if it is expired, but if it isn’t expired then this is an option. Although its not profitable, it saves you spending money to have your stock properly disposed of.

If you have the option to donate your products, this is also much more eco-friendly and sustainable, which is always a bonus!

You have the ability to incentivise customers to purchase your dead stock through discount sales and bundles. You could either discount the product itself, or you can offer it as part of a bundle. You could also create a ‘mystery’ product bundle listing, and use the dead stock in the bundles. However, you need to review your returns policy as customers may be unhappy with the dead stock bundle, and may try to return it which of course results in the dead stock being placed back in your warehouse.

When you end up with dead stock, it may be time to crank up your marketing strategy. You could create ad/social media campaigns of your dead stock SKUs and this may encourage customers to make a purchase. Alternatively, you could partner with an influencer and customers may feel incentivised that way.

Another option you have is to sell your stock by offering it to other brands or retailers through wholesale purchases. You may have more luck since wholesale purchases place orders for large volumes of stock at once and you may be able to move all your stock out through one singular order. You’ll still make money and free up storage space, therefore reducing your overall costs. Win win!

The JIT system is a model whereby the optima amount of stock is in the right place at the right time, allowing businesses to reduce their overall storage costs by ensuring there is never excess stock on site. It is always just the right amount.

This method also allows businesses to reduce wastage due to obsolescence and damage, while also reducing their production costs, shipping costs, insurance costs, etc.

The JIT method works in accordance with customer demand. However, the issue with this is that if customer demand suddenly increases, the business may not have enough stock to meet demand, resulting in missed sales.

Economic order quantity (EOQ) is a formula based method, and is largely calculated by using historical data. This method ensures you have an optimal level of stock over a certain period of time.

EOQ aims to find a balance between having enough stock to meet customer demand, while ensuring you aren’t overstocking and paying excess storage fees.

Since this method is based on historical data, it won’t take into account that sudden increases in demand can occur, which can lead to some inaccuracies. Not only this but if you start with inaccurate historical data, your calculations will therefore become inaccurate.

Read more about the EOQ method here

DSI is a financial model of inventory management and refers to the process of measuring the average number of days it takes for new inventory to turn into a sale.

Using DSI will allow you to have a better understanding of; your overall business health, how effective your marketing strategies are, and how effective your sales strategies are.

If your DSI is long, this is an indicator that something isn’t working. You could either just be struggling to shift stock, or you may be holding too much stock, making it harder to shift in accordance with what your current demand is.

FIFO is an abbreviation for ‘First In First Out’, while LIFO is the opposite, standing for ‘Last In Last Out’.

The FIFO method is a process whereby stock received first, is the first stock to be sent out. For example, if you receive a batch of stock on Monday, and another on the following Monday, orders placed by customers will be fulfilled with the first batch of stock and then the second batch once all those products are gone.

LIFO, is the opposite. Stock received most recently will be used before stock received initially.

Both methods have advantages and disadvantages, read more about FIFO and LIFO below.

At TSP we handle everything, starting with the storage, picking, and packing of your products.

We serve a range of markets so we have experience storing, picking, and packing a variety of different products, so we’ve got you covered regardless of what you sell.

Outsourcing your pick and pack with us will help free up your time, while also improving the entire process due to our highly experienced team of staff.

Regardless of whether you just do B2C or B2B, or a mixture of both, our team have the knowledge and resources required to successfully get your orders picked, packed, and shipped to your customer or chosen retailer.

While we handle your B2B and B2C fulfilment, you can focus on putting more time and money back into other areas of your business, such as your sales, marketing, and product development.

After we pick and pack your orders, we ship them too.

We ensure you get better deals on shipping and packaging by letting you leverage our buying power, meaning you can save money and put it back into growing your business.

We also partner with a range of couriers, ensuring the needs of your business are being met through a diverse choice in reliable couriers.

We are your one stop solution for all Amazon seller services, including FBA, FBM and SFP. With over 20 years of industry experience you can be assured that we are fully equipped to support you..

So regardless of what Amazon service you’re using, or if its a mix of all 3, we’ve got you covered. Check out our Amazon page for more information regarding our Amazon fulfilment services.

Our cloud-based system, MintSoft is easy to navigate and provides you with real time updates so you can always make informed decisions about your stock.

We also run our own in-house system that can provide accurate information for the following;

• Notify you of stock replenishment needs
• Notify you of when and when not to re-order
• Ability to track inventory
• Ability to automate orders
• Respond to trends

Returns are inevitable when it comes to your eCommerce business, but managing them correctly is a critical aspect on 3PL services. Here at TSP, we will handle the entire process from start to finish, helping you to main a high level of customer satisfaction.

Are you a sustainable business? Looking to become more sustainable? Working with us means you can do your bit for the planet too, since we are a certified carbon neutral 3PL company.

Do you sell custom bundles or kits? We’ve got you covered. Our team is trained in kitting and bundle building, so you can be assured your customers will receive their orders in an accurate, timely manner.

Do you require international shipping, or are you looking to expand into global markets? We’ve got you covered with our extensive network of couriers and global warehouses.

Explore our global fulfilment solutions page to see how we can help you dominate the global market, right from the heart of Newcastle.

Here at TSP we are one of the very few Newcastle based order fulfilment companies with a dry bonded warehouse license.

Our network of freight forwarders means you can easily utilise the power of cross-border selling, allowing you to boost sales and drive growth.