For small businesses, every dollar counts. Managing cash flow, minimizing overhead, and making smart purchasing decisions are essential to staying afloat. One area that can quickly drain resources is excess inventory. It can lead to cash flow issues, waste storage space, and deplete any reserves your business has. While having stock on hand is essential, having too much of the wrong items can be a costly mistake. 

Excess inventory can be a big problem—but it’s not the end of the world. Read on to learn how to store excess inventory, how to get rid of it, and strategies to ensure it doesn’t happen again. 

• Storage Solutions for Excess Inventory
• 6 Ways to Get Rid of Excess Inventory
• Long-Term Strategies to Avoid Excess Inventory
• Manage Your Excess Inventory Efficiently

Storage Solutions for Excess Inventory

Do you have excess inventory that needs a new home? It’s not the end of the world—you just need to get a little creative! Consider these inventory storage ideas to get your products under control. 

Utilize home storage

If you’re looking for a free solution to storing your excess inventory, the answer may lie closer than you think: your home storage. Check whether you can store excess inventory in these places around your home: 

• Garage. Garage storage offers an easy solution for excess inventory. Set up shelving and cabinets, get some storage bins, and get to work. Be sure to label bins for future inventory retrieval. 
• Closets. If you have unused closets, you can safely keep excess inventory there, too. Make sure you’re taking advantage of all your vertical space with overhead storage shelves and more. 
• Spare bedroom. An unused bedroom can be easily transformed into a storage spot for your products. Just like in your garage, look into vertical shelving units, clearly labeled storage containers, and other solutions. 

Optimize warehouse space

Have a warehouse? It’s possible you’re not utilizing the space as well as you could. By optimizing your warehouse space, you may be able to create new storage for your excess inventory. Here’s how to do it: 

• Clear everything out of your warehouse. Although this may seem like a big task, starting with a clean slate is the best way to make good use of your space. 
• Draw a floor plan. Next, draw a floor plan of your warehouse and play around with different storage orientations. You may want to create “hallways” using shelving or attach hanging storage from the ceiling. Be sure to maximize all that vertical space for the most storage possible. 
• Bring it to life. All that’s left to do is bring your new floor plan to life. Install your shelving and storage hardware, then pack it all back up. 

Invest in offsite storage

If you don’t have enough small business inventory storage, it may be time to invest in off-site storage. Storage units from a reputable self-storage business like Key Storage are a great option. Look for a facility that’s conveniently located and well-maintained with sufficient security. Depending on your product, you may want to look for additional features like climate-controlled storage to store vinyl records or other heat-sensitive products. 

When signing up for a storage unit, be sure to read the contract carefully. Month-to-month rent is a great bonus, as you’ll have the flexibility to end your rental as soon as you no longer need it. Businesses with significant seasonality may want to scale up for seasonal storage and scale down during off-seasons. 

6 Ways to Get Rid of Excess Inventory

Storing your excess inventory is just one piece of the puzzle; getting rid of it is just as important. Read on to learn our best tips for doing so. 

Bundling products

A great way to move excess inventory is by bundling it with others and offering a small discount. Consider the following bundles: 

• Savings for multiples. Consider selling multiples at a small discount. For instance, one item may be $30, or a customer could get 3 for $80.
• Pair with top sellers. Move excess inventory more quickly by pairing it with your top-selling products and offering a small discount on the two. Be sure to make logical pairings for your best possible results. 

Discounting inventory

In addition to bundling, you can also offer a direct discount on your excess inventory. Even small discounts of 10% to 15% can dramatically increase purchases. You can discount inventory directly or offer store-wide sales to incentivize purchases. 

Selling online

If you’re only operating out of a brick-and-mortar, it may be time to look into selling online. Opening up an online store can expand your customer base from your surrounding community to the entire country. There are some overhead costs and time commitments that come with transitioning to online sales, but you may find that it’s worth it if it means selling your excess inventory. 

Before launching into online sales, it’s a good idea to consider both feasibility and market demand. For instance, if you’re selling used furniture, nationwide shipping costs may cut into your revenue too much. 

Remarketing

Have you ever browsed a product online, then later received an ad for the same item? That’s a type of advertising known as remarketing, sometimes called retargeting. It’s a great way to re-engage customers who showed an interest in your product, but haven't made a purchase. 

Remarketing is fairly easy to get up and running with. You can do it across social media sites like Facebook and Instagram, on Google and other search engines, or a range of other places across the internet. 

Donating for tax benefits

If you’ve decided that you simply won’t be able to sell your excess inventory, there’s still one way to turn it into savings: donations. Charitable donations to qualified 501(c)(3) organizations can help you save on taxes during tax season. Excess inventory can be deducted at a rate of the cost of the inventory plus half the difference between cost and fair market value. The calculation may sound complex, but the result is simple: financial savings. 

Liquidating products

Another option for getting every last drop out of your excess inventory is liquidation. This is the process of selling your product to inventory buyers at an extremely reduced price. While you may not make back your cost on the product, you’ll no longer need to pay to store it, so you’ll still end up with savings. 

Long-Term Strategies to Avoid Excess Inventory

Excess inventory can be a costly problem, and it’s not a mistake you want to make more than once. Read on to learn long-term strategies to minimize your risk of leftovers. 

Improve forecasting

If you regularly find yourself with too much inventory, your problem likely begins with your forecasting. Look to these metrics to improve your forecasting accuracy: 

• Historical sales data. The first place to start is with your sales history. Take a look at the past several years of sales and look for trends like top selling and slow selling products, sales peaks and valleys, and seasonality. 
• Market trends. In addition to your own sales information, consider the broader sales market, including economic conditions and global climate. In economic upturns, people tend to spend more freely. In downturns, they tend to tighten their purse strings and spend more carefully. 
• Inventory turnover rate. This metric measures how quickly inventory is sold and replaced. If you have a high inventory turnover rate, it’s a good indicator that you’re forecasting well. Use this as your primary forecasting KPI. 

Use inventory management software

Another way to avoid excess inventory is with inventory management software. Manually tracking your inventory leaves lots of room for human error. Inventory management software provides real-time inventory tracking and can even automate processes like reordering when inventory gets low. 

Conduct regular audits

Even with better forecasting techniques and the help of inventory management software, regular inventory audits are a must. They can reveal gaps in your processes and identify areas for improvement. 

To conduct an audit, you’ll need to take stock of every piece of inventory. This can be done all at once or in cycles to minimize the heavy lift. If you can’t conduct your own inventory audit, look into external inventory auditing companies to do the hard work for you. 

Manage Your Excess Inventory Efficiently

Excess inventory can be a huge inconvenience. Fortunately, there are strategies to help. With smart inventory storage ideas, effective sales strategies, and better forecasting tools, you can get your inventory management under control. 

Looking for safe, secure, and cost-effective small business inventory storage for your excess product? Choose Key Storage. Contact us today to learn about our commercial storage options.