Are you handling returned and excess inventory? Here are some things to keep in mind:

What sets the best consumer brands and retailers apart from the rest? Having a well-designed and thoroughly tested product is one sure answer. Whether offline or online, there’s definitely something to be said for a useful and efficient shopping experience. Even ads that are slick and have high production values ​​lend such companies widespread credibility. But as any leader in this field will tell you, there are many factors that contribute to a company’s continued profitability and success as a world-class consumer goods supplier.

While consumer experience, marketing and the product itself are at the forefront, areas of operation include: Warehouse optimization, inventory management, logistics It hums and powers the business behind the scenes, and is just as important in the big picture.

Whether you are a retailer or a manufacturer, it is important to keep your warehouse, distribution center, and loading dock neat and clean.

According to National Retail Federation (NRF), unsold inventory costs U.S. retailers $224 billion each year. That’s why it’s essential that your warehouse teams and returns processing systems are operating at peak efficiency, especially during the early weeks of a new business cycle or the period following a surge in sales and returns. These times may include the hustle and bustle of the holiday season, the transition from winter to warmer seasons, back-to-school season, a new product launch, or the immediate aftermath of a major marketing campaign.

Let’s take last holiday season as an example. with the americans $964.4 billion spent Just last holiday season (highest number NRF’s original prediction) Unwanted items are returned after the sale period, once again flooding warehouses with additional inventory and worsening existing unsold inventory. According to this year’s study, the return value from late November to January was Total over $100 billion.

Although businesses across the country have enacted new strategies to reduce return rates, managing returned inventory remains an ongoing challenge for businesses. Therefore, proactive measures are needed at any time of the year to mitigate this problem. But where should you start?

Whether you’re looking to improve your existing inventory management practices or are just starting this journey as an emerging brand or retailer, here are five tips for planning your inventory management and reduction strategy.

1. Strive to create space

Accommodating the influx of returned inventory poses significant challenges for retailers and brand leaders in terms of warehouse space allocation. For small businesses that primarily handle consumer goods such as portable electronics, wallets, and jewelry, warehouse inventory management can be relatively simple due to minimal space requirements and reasonable margins. A company may decide to store these items despite poor sales in anticipation of a future opportunity to sell them.

However, not all companies have this luxury. Consider a company that specializes in appliances, furniture, and other household items. Storing or moving bulky, heavy items across the country may require special equipment, additional time, and additional personnel. Even companies that handle smaller inventories, such as the items mentioned above, run into problems when operating at significant scale. In fact, any type of product can become a problem when inventory begins to build up in warehouses, distribution centers, and loading docks. Aside from the obvious problem of opportunity cost of surplus warehouse space,As inventory builds up, it can pose a potential safety hazard to warehouse employees, increasing the overall liability of the business.

At least some of the practices adopted should be designed to address space issues. Likewise, any solution or partner you engage should be able to explain exactly what they do to prioritize physical space availability in your facility.

2. Adopt automation and analytics solutions

Major brands and retailers have recently begun increasing investments in artificial intelligence, machine learning, and advanced data analytics to increase efficiency in handling excess inventory and returns. Automation and data analytics enable streamlined verification and accurate classification of returned items in returns processing, faster decision-making about reselling or repairing products, reduced errors in manual processes, and early identification of trends in returns data for faster refunds or refunds. It offers several benefits to processing returns, including expediting: exchange.

Any solution worth considering must include or integrate the latest AI and process automation capabilities, which is absolutely critical. ~ have to It must be data-driven. If you can’t track the performance of a practice or are thinking about implementing it, don’t expect approval from other stakeholders and expect your organization to keep up with the competition.

3. Work with a 3PL expert

Third-party logistics (3PL) solutions play a critical role in performing essential supply chain functions and streamlining processes such as point-to-point shipping or negotiating favorable prices with carriers. As another example, hiring a 3PL partner to implement a cross-docking program means that your organization’s goods will experience minimal handling and storage time when traveling to the country. This frees up warehouse space. Increasingly valuable products– Be as clear as possible.

With large, capable fleets and a focus on moving goods efficiently, 3PL companies ensure broad geographic coverage, more timely pickup and delivery. and This may provide better tracking and documentation than less specialized approaches. There is little reason to rely strictly on in-house methods when dealing with sporadic inventory changes.

4. Aim for speed.

When reselling excess and returned goods on the secondary market, speed can be as important as recovery price. Why is this like this? First, slow-moving inventory comes with carrying costs. This simply means the price it costs to move and store the goods. Second, excess goods create opportunity costs, that is, value sacrificed by not using resources to hold and move better performing products. Finally, the value of most goods depreciates over time, with items such as clothing and electronic technology going out of style and obsolete especially quickly.

If this sounds familiar, increasing cycle time as a key metric may be an important step for your business to take. simply Tracking But there isn’t enough time. The value of process innovation to streamline product flow and continuously replenish supplies for global buyers cannot be overstated, but it is easier said than done.

5. Emphasize predictability

There are countless local retail chains, SMBs, Mom & Pop Shops, and entrepreneurs who run online stores as a side hustle. As a retailer or manufacturer, you should view the constant demand for affordable, high-quality inventory as an opportunity to continually clear significant amounts of new, but unsold or purchased inventory from your warehouse.

The ideal reverse logistics partner should be able to connect your business with buyers and even manage the logistics aspects of selling excess inventory. However, few of these services can help you secure guaranteed pricing through a variety of sales models, including time-limited contracts. Working with this rare type of recommerce partner ensures your items are delivered ahead of time, helping with financial forecasting and preventing warehouse pile-ups that can ruin your business at an inopportune time. And just as you appreciate predictability, shoppers will appreciate knowing that the products they rely on will not run out of your shelves. This goes a long way in building resilient, trusting relationships that will remain strong for years to come.

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Given the constant sales and returns of consumer goods, retail executives and their teams realized that handling remarketing in-house was simply not sustainable. Alternative solutions, such as donation and recycling, often involve navigation regulations, higher oversight, and additional costs depending on the volume of product used. While many companies are already selling merchandise in bulk to qualified buyers, some major brands and retailers are taking this approach one step further by engaging a dedicated recommerce partner to help build a complete, managed reverse logistics program. We developed it further.

B-Stock, the world’s leading B2B marketplace for returns and excess inventory, offers a unique combination of benefits that sets it apart from other options. Our global buyer network provides: Constant demand and competition—Your surplus. Various flexible sales modelsIncluding spot auctions, pre-negotiated contracts, and easy brokered sales, organizations can prioritize recovery rates, predictability, or speed. It combines nearly 20 years of market data. Advanced predictive analytics This means our experts can advise effectively on how to list, group and price your lots to maximize your return on investment. These benefits, along with numerous compliance features, a responsive customer support team, and exclusive partnerships with trusted 3PL companies, help drive strong recoveries at all sizes.

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