Excess Inventory

I have consulted with several clients over the past few months who have been in financial crisis yet are holding on to un-needed inventory, tying up both dollars and valuable space. In two cases selling off the excess material would have been the equivalent of more than one month’s gross receipts, and would have done wonders to improve cash flow. The inventory in question had collected dust for many months, and will continue to do so as the owners elected to do nothing, even though the inventory is not likely to be used or sold.

Here are some things to do when caught with excess inventory you can’t move:

1. Have a sale and market it sufficiently to attract enough buyers.

2. If the inventory is raw material, find a way to use it in creating unique products, re-purpose it, or find another manufacturer to buy it at a discount.

3. Sell it on an E-Bay auction.

4. If all else fails, scrap it. At least you’ll free up some space and write off the loss.