One of the key advantages to having an inventory management system in place for your retail business is having the ability to accurately track merchandise, from storeroom to sale, which is key to profitability. Technology tools makes it easy to forecast how much of any item to have on hand at specific times of the year, for example.
However, we can’t always predict what shoppers will do. Items that were popular last year may fail to sell as well this year. That can lead to having too much inventory taking up valuable space in your storeroom or warehouse. When this happens, you have an excess inventory problem that can get costly if you don’t get rid of items quickly.
You could certainly do a liquidation sale, but that means slashing prices, cutting into profitability.
There is another approach you could take that could potentially spread some good will between your brand and your community.
Have you heard of “gifts-in-kind” donations? These are contributions of products rather than cash that can be given to charities, non-profits, schools, or to a cause.
In Entrepreneur, Gary C. Smith, the president of NAIER, “America’s largest and oldest gifts-in-kind organization” writes that by donating merchandise, businesses can get tax benefits “equal to the cost of the inventory donated, plus half the difference between the cost and fair market selling price.” And, it is easy for any business to create a gifts-in-kind donation program.
Whether you choose to create one for your company, or you reach out to an organization such as NAIER to do it for you, it is a rewarding solution because such a program will “help your business cut its losses, while benefiting the community at the same time.”