What to Do with Slow Moving Inventory

Jul 16, 2013 10:06 AM  By

handheld-scanner-inventory-300Slow moving inventory is an issue that retailers never want to have, but more likely than not, will. But that doesn’t mean you have to let slow moving inventory collect dust. Dotcom Distributions owner Maria Haggerty says you can use it to either turn a profit or gain valuable customer appreciation.

Slow moving inventory, or “slowmos” as Haggerty calls it, can be defined as SKUs that haven’t moved in 90, 120, or 180 days depending on the products you sell. The number of slowmos, she says, can range from one or two items to thousands.

Most retailers, she said, tend to take the same approach they do with their personal closet than they do with the warehouse – let slow SKUs sit and hope it might be useful at another time. But more often than not, it just becomes an extra expense for the warehouse.

There are ways to combat the dust collecting, according to Haggerty. “We are seeing more and more retailers use business intelligence to move product,” Haggerty said.

If you are a retailer and find yourself with one or two products that are not moving, look to your data. There is a high possibility you might be able to promote those products to customers you know have purchased something similar in the past.

For example, Haggerty said, if you have a pair of size 10 pants in stock, find a customer that always buys size 10 pants. You can then work with your marketing team to offer the customer a promotion to purchase those size 10 pants at a discounted price.

If you are have smaller items such as lotions or creams, Haggerty said, put some in already existing orders with a note thanking them for their business.

“What the retailers get from that is really good loyalty from the customer. I mean, who doesn’t love getting an extra surprise in their package?” Haggerty said.

For the SKUs that come in the hundreds or the thousands, Haggerty said, retailers can look to using their own outlet stores (if they have them) and offer the products at discounted rates. Or retailers can move those products to existing discount business such as dollar stores or an off-price retailer like TJ Maxx to help move, and hopefully sell out, of the products.

But probably the most important advice Haggerty can give to retailers looking to move inventory is to know it is there.

“The longer inventory sits, the more expensive it will be for you. You also really run the risk of that inventory becoming obsolete,” Haggerty said.

Not only are retailers losing out on a sale, but they ultimately are paying for that warehouse space.  To counter, Haggerty said, retailers should have an ongoing counting program inside the warehouse where slow moving inventory can be identified on a monthly, quarterly, and annual basis.

“Someone needs to be in charge of looking at the slow moving inventory and they need to remove the emotion from the warehouse,” Haggerty said. “It’s not any more complicated than working with your own closet. You need the discipline without the emotion and it needs to be done systematically.”



  • Karlyn

    When you say that Slow Moving Inventory is usually defined as SKUs that haven’t moved in 90, 120 or 180 days, do you mean SKUs that haven’t sold at all or just the available SKUs that haven’t completely turned over?