Inventory Control: Hidden Cost of Dead Inventory
The cost of carrying “dead inventory” can be high and burdensome to a business’s bottom line. Dead inventory is defined as inventory that isn’t selling, or even as expired pharmaceutical inventory or perishable products. It is estimated to cost the US retail industry $50 billion per year.
Here are a few of the hidden costs associated with carrying dead inventory, including:
- Increased storage costs
- Increased labor costs
- Opportunity costs
- Higher insurance premiums
- Higher interest payments
What Can You do About Dead Inventory?
There are several ways to reduce dead inventory, including reducing prices, bundling or kitting products, offering steep discounts, selling the products in a secondary market, or returning the products to the supplier. You also need to stay on top of your market’s trends by regularly and thoroughly researching your customers’ wants and needs. If you are on top of this, you are less likely to retain dead inventory.
The best way to handle dead inventory is to implement an efficient inventory management system with advanced reporting features, such as TRXio. TRXio provides robust reporting features that allow users to monitor daily item movement, inventory minimum/maximum levels, verified inventory inventory by location, product at destination and much more. It is critical to run regular inventory reports to monitor items that may have lackluster sales, may be expiring soon, with excessive quantities, and much more.
For more information on inventory control, or regarding managing dead inventory, please contact TRXio at 844-868-7225.
Other Inventory Management Techniques
Other Inventory Management Techniques: