How To Deal With Excess Stock In Your Inventory

1. How to Deal With Excess Stock in Your Inventory? Excess stock in the inventory means overstock and surplus. By whatever name you call it, excess stock is an expense for your company. With the excess stock, you have multiple other fixed costs which hinder your revenue and you can end up getting losses. Excess stock Laptop Ageing Stock and Monitors Ageing Stock occurs in the company due to poor inventory management and bad forecasting of the need for inventory. Most of the stock finishes with the sales, but excess stock represents the Desktops Ageing Stock and Mobile Ageing Stock that is not selling any further. There could be a number of reasons for which excess stock accumulates. They are- Upgrade in model Less use of the product

2. Products with season needs Change in design or price Competition Change in technology Whatever may be the reason? Excess Tablets Ageing Stock and Electronics Ageing Stock is an expense for the company. And companies should try to liquidate the stocks before they exceed the shelf life. Excess stock comes with many cost considerations. First of all, the company has spent money on the raw materials and production of the stock. They are consuming the area in the warehouse which increases carrying cost, and there are costs associated with the upkeep of the inventory and warehouse. Carrying costs shoot up much faster as there are costs associated with the rent, mortgage payments of the warehouse, labor cost, insurance, and interest. Also, the cost of the excess stock is not recoverable as they are in excess and not able to sell. Excess stock is best classified as the declining stage of the product life cycle. In the beginning, there is demand for the product but with the change in the demand, price, or competition the products are not sold. However, there could be operational advantages to excess Home Appliances Ageing Stock, but they are not available for financial reasons. Here are disadvantages of excess stock. Increased storage cost The stocks are stored in controlled and better conditions like in a storeroom or warehouse. The cost of buying or renting the space is added to the price of the stock. With the warehouse costs shooting high up companies face increasing the cost of the stock. Product Degradation Storing excess stock can lead to compromises in the quality and grading of the stock. If they are not managed well and not stored in proper condition their quality will be compromised and they will degrade with time. Although, smaller quantities and reorders make it easier for businesses to identify quality problems.