Too Much Surplus Inventory?
We’ve all heard the moniker, “an ounce of prevention is worth a pound of cure.”
Knowing how to efficiently liquidate your surplus inventory is definitely important, but knowing how to avoid it in the first place is even more vital. To effectively manage your inventory, here are a few tips for avoiding surplus inventory altogether:
Market Research is the primary, fundamental element that all business decisions should be based on. Unfortunately, however, it is often the most overlooked. Market research should give you, if done properly, the insight into whether or not a product will sell, at what price point, and if your market is actually willing to pay for it.
Knowing your market includes:
- Knowing your customers
- Knowing your competition
- Knowing your own company
- Knowing your market
Know your market
Knowing your market encompasses a thorough understanding of who your target market really is; demographic, geographic, and psychographic. What trends do you see appearing in technology, thought, and attitude? What conversations are taking place in the marketplace? What problems are there in the market and is there already a solution? If there is a solution, how much does it cost, how is it packaged, how is it presented? Do you have an alternative solution that is better, faster, or cheaper? What is your competitive advantage?
Know your own company
SWOT analysis is an effective method for adding clarity and perspective to a project. If you know what your strengths and weaknesses are, what unique opportunities are available, and understand your company’s potential threats, you have a much better chance of working within your core competencies and leveraging your existing resources.
Know your competition
Again SWOT analysis is a very effective tool, but you can investigate further by actually shopping their stores, ordering their products, or calling their customer service desk. (Wikipedia offers a very thorough definition of Competitor Analysis.) The key to competitor analysis, though, is objectivity. If you are objective and accurate in your competitor analysis, it will allow you to see the gaps and opportunities that may exist, so that rather than trying to shape a market to fit your product, you can shape your product to fit the market. (This is great preventative maintenance for avoiding surplus inventory.)
Know your customers
Before you even think about creating a new product line, you should always ask the market first. Listening to customer feedback, complaints, and suggestions is a great starting point, but sometimes you just have to ask. What the customer wants and what you think they need are usually two different things. Customer surveys, focus groups, and polls can give you great insight into the minds of your customers but with new technology like blogs and internet community forums there’s no excuse for not knowing what your market is doing, saying, and thinking.
In closing, it boils down to one vital question: Is your business product-focused or market-focused? By making thorough market research your foundation, you can save yourself much despair over slow-selling, stagnant, and surplus inventory. Remember, it’s not about what you think your market wants, it’s about what your market will actually pay for. By becoming more market focused it will help you to avoid surplus inventory before it ever becomes a problem.
For immediate help with your inventory liquidation, please call 1-877-279-3353
or you can send us an email at support@ccmllc.com
