With December fast approaching, there are many important concerns with which companies have to deal—including how to manage year-end inventory.
The fourth quarter is a busy one from an inventory perspective. Companies must move unsold summer and back-to-school goods from warehouses to make way for seasonal items. Products for Halloween and Christmas are required in time to generate sales. And if a company is planning a new product launch, common in the final quarter of the year, additional warehouse space is required for those finished goods.
However, space is not the only issue.
Manage year-end inventory and avoid costly write-offs
Excess inventory affects cash flow and ties up dollars needed to fund other initiatives. When summer flip-flops and back-to-school pencils are claiming precious space in a warehouse, many companies try to push them through the system by either marking them down or selling them at a significantly reduced price. The goal is to make way for higher margin items, but if goods are written down (or worse, written off), the bottom line is negatively impacted.
Reputation management begins with effective year-end inventory management
When manufacturers turn to liquidators to sell last season’s goods, they typically specify where that product can, and cannot, be sold. For example, resale restrictions often stipulate that product should only be sold outside Canada. Yet some liquidators are willing to take chances by unloading goods in inappropriate channels.
An alternative solution to managing year-end inventory
So what should a company do when products appropriate for July and August are claiming precious space in its warehouse in November and December?
Corporate Trade is one viable option that not only protects the bottom line, but also a brand’s reputation. A trustworthy Corporate Trade company prefers to sell inventory to a buyer who will not jeopardize resale restrictions, even if that approach means making less money.
The fourth quarter is often a busy time for Corporate Trade companies. A company once contacted Active Canada on December 21st to move truckloads of air conditioners before year-end. Less than a week later, on the day after Christmas, we successfully sold the air conditioners.
Corporate Trade can also facilitate moving goods to a third-party location in order to free up warehouse space until we find a suitable buyer. In these situations, Active Canada acts as a new customer, buying inventory for cash in exchange for a future obligation to purchase media space.
It is never too late to use Corporate Trade to manage a year-end inventory problem. Before the fiscal draws to a close and out-of-date inventory influences the bottom line, consider this resource to solve your inventory problems.
