Slow-moving inventory or slow-moving goods is a term used to describe an item that has been in stock for too long. However, the grouping of slow-moving goods is very dependent on the type of industry or economic sector of the goods. For example, goods that are not delivered within 90 days may be considered slow-moving goods in some industrial sectors.
The existence of slow-moving goods will take up space, and the longer it is, the more difficult it is to manage. This will affect cash flow because there is capital tied up in these slow-moving goods. There are several factors that allow an item to become slow to move, such as declining market conditions, wrong sales projections, buying too many goods, and promotions carried out by competitors.
How to identify slow moving goods?
The best way to identify slow moving goods is to categorize goods according to existing financial management. However, there are other ways to do it, inventory can be categorized by several analysis techniques.
Some industries sort the total number of months the goods are stored to be able to categorize whether the goods are slow moving or not. They calculate the total number of months the item was stored and then divide it by the total inventory by the average monthly usage.
In general, slow-moving items have more time to hold in inventory, sometimes months.
How to manage slow moving items?
Slow-moving goods can become bad assets if they are not managed properly. Business capital cannot rotate smoothly and the result can be a loss, where the capital that should be able to be used for company development becomes stuck. Therefore, it is very important to be able to manage slow moving goods, here are some tips:
Identify slow moving goods and prepare the report
Some industries have their own way of calculating slow-moving goods, there are 3 ways that are usually done by several industries, namely:
The most common way to do this is to count the number of items that are overstocked. An item can be said to be slow moving if it has been in the warehouse for more than 12 months and there is no demand for it for more than 6 months.
The second way is to calculate the existing stock and then determine whether an item is included in slow moving goods or not. This method usually has a fairly high accuracy of results.
And the last way is to determine the frequency of delivery of an item. Goods that are not delivered within 120 – 150 days are usually included in the category of slow moving goods. Usually, in a warehouse that has a large capacity, the calculation is done by counting the goods transported using trolleys.
Look for ways to make slow-moving things move quickly
If you find that there are slow moving items in your inventory, you can do the following:
Make sure these items can be easily found on the website, there are still many people looking for these items.
If the item can be found easily, try to check again whether the photo or image of the item is clear or not. Use high-resolution photos or images with clear product descriptions. This can increase traffic to your site and help promote those slow-moving items.
Give discounts and offers on slow moving items
The best way you can do this is to sell the item, you can do these two things to speed up the sale of slow moving items:
Many buyers like to look for goods at a lower price. You can make information about price discounts for these items and attract lots of buyers. Even though you have to sell the item at a very low price, you can prevent bigger losses for your business.
Then you can also provide special offers such as daily promotions for these items. Customers will certainly be interested after seeing a limited time promotion.
Use a liquidator when necessary
When you have implemented various strategies but are still not producing results, you can consider the option of using the services of a liquidator to immediately cash in on the item.
How to turn slow moving goods into assets?
Many businesses are trying to optimize inventory management by running a practical and economical business. However, time will tell whether the business is successful or not. For most sellers, slow moving goods is a common problem. Don’t immediately assume that slow-moving items can immediately destroy your business, because there are still opportunities to earn money from these items.
You can follow the following methods so you can turn slow-moving items into assets.
Review your sales strategy
The first thing you can do is review the sales strategy you used. Try to identify which methods are effective and which are not. Then, you try to look again at the target market that you set. Also make sure the products you display have good photos and are attractive to buyers. You can also make sales and promotions on various platforms such as social media, email, or the Google display network.
Use a variety of sales strategies
If you have a lot of slow-moving items, try giving promotions and discounts. You can also do big discounts of 50% – 60% on certain items. Inform consumers if there is a big discount for a short time. You can also place promotional banners on your website.
Warehouse discount
Regular customers get clearance promotions or sales at least twice a year. Unsold old stock is usually cashed out via a sale that usually lasts 3 to 6 months. Use social media to spread information about this discount to many people.
Seasonal discount
Try to reduce stock at certain times such as holiday time. Vacation time is the right time for you to reduce slow moving items in your inventory or stock. You can also make seasonal discounts on occasions like Christmas and New Years or during the summer.
Change the appearance of the shop window
You can also change the appearance of the product showcase for slow-moving items. You can put them in an easy-to-see place, such as on the front shelf, cashier, or where many people passing by can easily see them.
Combine hard-to-sell items
Combining two or three items that are difficult to sell will make customers more interested in buying them. You can also do this to sell slow-moving items.
Conclusion
Slow moving goods are often an obstacle in many types of businesses. Business actors must be able to learn from previous incidents and formulate prevention strategies. For example, don’t buy items in too large a quantity because it could cause problems in the future. There is also a need for more attention to many aspects of inventory such as purchasing, processing, storage, and selling can be done more easily using the application.
You can also use a third-party logistics service (3PL) that has a special dashboard for inventory management, such as NimbusPost .
NimbusPost gives you full access to manage operations by providing a variety of information, data, and analysis that you can use to manage SKUs, stock items, and product vacancies. Of course, this feature will be very helpful for managing slow-moving items in your business.
