business 101
How Savvy Retailers Retire Slow Movers
Have you seen it in your store? It’ s been there, day after day, silently sitting on your shelves, slowly collecting dust and eating up your cash flow. What is this insidious resident? It’ s … dead product.
Dead product is inventory that has sat on your shelves for too long and is unlikely to sell at full retail value. You can determine if you have dead product in your store if it has a low inventory turnover, in other words it falls below the average turnover rate for products in your store, or it has reached its expiration date. The retail rule of thumb is that any product that hasn’ t sold after 12 months is dead.
So what’ s the danger of dead inventory? Rather than make money, dead inventory costs money and takes up prime real estate. That’ s why performing routine“ checkups” on your inventory is vitally important for the longevity of your business. Getting rid of dead inventory makes room on your shelves and frees up cash flow for new products that turn a profit.
The good news is that dead inventory doesn’ t have to be a total loss. There are several steps you can take to resuscitate slow-moving products. continued on page 10 >>
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