Let’s get straight to the point here… excess inventory for retailers is never ideal – period. The reality is that when merchants carry too much inventory, their budgets become strained and their stock becomes overwhelmed, which ultimately leads to a variety of operational nightmares that retailers should aim to avoid. Keeping this in mind, consider these do’s and don’ts when it comes to managing surplus inventory for your retail business.

Do Increase Merchandising Efforts to Help Move Inventory

Any seasoned retailer can attest to the fact that merchandising plays a role in product sell-thru. Through merchandising tactics, retailers can adjust their inventory visibility among consumers while also shifting the overall engagement between inventory and customers so that it can sell faster. Cross-merchandising is also a great strategy to consider when trying to gain stronger sales among inventory. Collectively, the various merchandising strategies that retailers apply to their stores should be used in combination with helping to increase sales of surplus inventory and slow moving items.

Don’t Overlook the Value Vendor Relationships Can Offer Your Business

The same way you value the relationship between yourself and your store customers, vendors also value the relationships they have with their existing merchant clientele. Use this to your advantage when struggling to sell inventory from a specific vendor that did not perform as well as you anticipated, despite your efforts to help it do so. Often, vendors can offer a merchandise credit or apply a full refund to poor moving inventory. The catch, of course, is to not assume or depend on this strategy but rather use it as a last effort to help bring balance to your inventory and buying budget.

Do Consider Other Consumer Marketplaces to Help Rid Excess Inventory

It’s often assumed that if you don’t sell something in your store, you won’t sell it anywhere else, either, but this could not be further from the truth. In fact, you may find that welcoming other merchant channels into your selling strategy is the exact solution you need to help move slow moving inventory from your traditional storefront. Among the avenues you can use to do this include selling on eBay and Amazon, or placing the inventory you want to sell on your own social media channels to help reach new audiences that may not be able to get to your physical store. The power of omnichannel selling is a smart option to help rid excess inventory – and one that all merchants should consider for their businesses to avoid surplus inventory in general. 

Don’t Dismiss Donating Excess Inventory

When various efforts have been applied to moving surplus inventory and you still can’t seem to rid these items, consider how donating this extra inventory may make sense. Global Trade Magazine has termed this as “product philanthropy”, and explains that there is a generous tax benefit aimed at C Corporations that donate goods to charity. According to Section 170(e) (3) of the Internal Revenue Code, C Corporations that donate their inventory to qualified nonprofits can receive a tax deduction of up to twice the cost of the donated products.” Under the tax code, deductions are equal to the cost of the inventory donated, plus half the difference between the cost and fair market-selling price, not to exceed twice the cost. This adds up… as well as opens up opportunity for your retail business to make room for inventory that will perform better. 

Do Strategize and Manage Surplus Inventory

Finally, when you have surplus inventory to manage, remember that the worst thing you could do is not manage it all. Identify a strategy that makes sense for your unique store to help move your excess inventory, and open up both buying dollars and physical storage space that will ultimately welcome new inventory that you believe will sell better. Using data from your POS, aim to avoid slow moving inventory in the future by applying sales and markdowns to poor performing items, in combination with merchandising and marketing.

Don’t settle on keeping inventory that is simply not moving for your store and instead, consider what do’s and don’ts can help your store bring back balance in inventory and dollars. These collective efforts will undoubtedly help you in your efforts to move existing surplus inventory – but more importantly, avoid these challenges in the future.

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About the Author

Nicole Leinbach Reyhle is the Founder and Publisher of Retail Minded, a publication committed to supporting independent retailers through news, education and support, as well as the Co-Founder of the Independent Retailer Conference. Recognized for her expertise in independent retail, Reyhle has published thousands of articles about small business and is the Author of the book “Retail 101: The Guide to Managing and Marketing Your Retail Business” from McGraw-Hill. Additionally, Reyhle has contributed to Forbes, Fiverr, IBM and more, and has been the Spokesperson for Small Business Saturday from American Express since 2014. Learn more about Retail Minded at, at @RetailMinded on Twitter or at