Selling goods to customers is how businesses earn and make a profit. But what will happen if the demand is low for what you’re selling? For example, computers.
As a computer business, you sell computers and other hardware parts for a living. Currently, the demand for computers is only at 500, but your supply is 1500. So, you have 1500 in supply, resulting in more supplies than demand. What repercussion will this hold? Eventually, you’ll slash the price in order to bring back the equilibrium price and quantity and earn more than lose.
Putting up a sale is just one way of many on how to manage excess inventory supplies for businesses. The other ways are to give away merchandise, donate the items to charity, and to sell the items to other retailers.
Giving away items for free for both shoppers and even employees provide a sense of care coming from the side of the business. Aside from building loyalty, it also pushes customers to shop for more items in order to meet the requirements of the free item.
An example is setting up a promo that customers will get an item if they reach more than $500 in spending on participating items. As part of the marketing team, you can also have games during an event or do a giveaway on social media wherein customers will need to like your page, mention a number of the friends, and even place your hashtag on their post to garner attention.
But, do be aware that a known con of this is the business is not getting revenue from the items given away.
Donating the business’ excess items to charity is definitely a win-win situation for you. The gesture shows that your business cares; hence increases public awareness and corporate social responsibility. Imagine the press publishing reports about the business giving away items to the ones in need. It’s a great boost for you.
On the other hand, donating items will also give you a tax break. But, make sure to discuss this decision with your tax representative to make sure you’re aware of the benefits and how much will it be.
When it comes to the cons, it the same as giving away items. Of course, it’s a donation; therefore, there’s no revenue on the items donated.
A lot of businesses sell their excess products to retailers who specifically buy such items at a lower price. These retailers then sell these items on their websites or stores. Instead of giving away or donating some of your items, it’s a great choice to sell it to these retailers in order to get a small revenue.
There are more of these retailers existing than you think. There are also websites and apps that offer the same services. As a business, the team should get started in finding one that’s interested in buying your items and negotiate the prices that will benefit you and your revenue.
However, a con to this is this could hurt your image because your items can be seen as something “cheap.”
Definitely, oversupply is a challenge to overcome since it also involves the market’s interest in the items, inflation, how customers see your business, and more. As a business, these tips will definitely provide you with more options when there comes a time your product will also have a slow pace in sales.
Always remember, whether already in the business industry, planning to start one, or even looking for a business for sale on real estate agencies, such as National Brokers Network, you should have a concrete plan how the business go the long-term in order to come up with strategies to counter problems like oversupplies or low sales.