How to effectively get rid of dead inventory

By Greg Carradus

Once you’ve conquered the daunting task of counting inventory, it’s time to decide how to make your merchandise more profitable and work for you. With help from Jeff Sheets, founder and owner of OPE Consulting Services, and Jon Schreibfeder, president of Effective Inventory Management, Inc., I’ll show you how to get rid of your obsolete items.

If you’re going to get serious about any one aspect of your inventory, getting rid of dead and slow-moving items must be a top priority.

Think about it: You paid for every item that is stocked on your shelves, and the only way you’re going to get any of your money back is to sell it. Otherwise, you’ve just thrown hundreds, maybe even thousands of dollars away — dollars that could be put toward other areas of your business! The bad news is that you’re not always going to be able to get your money back on some of these items. The good news is that there are many ways you can get these items out of your business, and at least regain some of what you paid.

The first step is determining which items are dead and slow-moving. If you’ve taken counts, you’ve probably seen parts that you bought years ago but have never sold. Add those to the list. If you have an industry-specific business management system, you can run reports that will flat out tell you what your worst sellers are. Once you’ve identified these items, you have options:

1) Offer your counter-people an incentive to sell the product. Jon Schreibfeder has seen this work well with some of his dealers. If you give your counter-people an extra reason to sell the product, you could be amazed at what they can produce. Again, you may not make a profit, but at least all is not lost.

2) Check with your manufacturers and see if they will give you a percentage for the parts. Manufacturers will generally allow you to do this at least once per year. If you take this route, make sure you’ve identified as many of these parts as possible. Sometimes, you may not get money back, but rather store credit. For example, if you return $100 worth of parts, some manufacturers will give you a $100 credit. Regardless, it’s something! Make it a point to do a parts return every year, and make sure you have policies set up with your manufacturers.

3) Start an eBay account and sell your parts there. Jeff Sheets has seen a lot of dealers do this with great success. Just because you have parts that aren’t working for your business anymore, doesn’t mean that someone else won’t take them. Look at it as a type of garage sale. One person’s junk is another person’s treasure!

4) See if a competitor, or a business that carries products similar to yours, will buy the merchandise from you. It may sound crazy, but if there is a need for it someplace else, you’re still getting compensated for it. Plus, you’ve just gotten those dead items out of your business.

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Greg Carradus is director of sales for Ideal Computer Systems, Inc., a business management software provider. For additional information, visit


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