Overstock Inventory

Overstock inventory

Overstock Inventory, Causes and Solutions to Overcome

Everyone loves to browse online stores for shopping or just to browse. The ease of online shopping today makes people feel comfortable and feel no need to leave the house to shop. In a shop sometimes there are so many sizes, colors and products to choose from! But have you ever wondered what happens to inventory that doesn't sell in an online store? Too much inventory or overstock inventory can make a business not run smoothly. Find out more about what Overstock Inventory is and how an online store or business handles it.

What is Overstock Inventory?

Overstock Inventory is inventory that is too much stockpiled and cannot be sold in a relatively short time. These items are never purchased by the customer. Even if the goods are not damaged or defective, too much inventory or Overstock Inventory can be a hassle for shop owners. Just imagine, when supply exceeds demand, what happens? The company will certainly suffer losses. This could be due to over-delivery of products or poor inventory management. Although troublesome, these products can actually be resold to the secondary market. This is where you can create opportunities and can reap the benefits of overstocking.

What causes Overstock Inventory?

There are many reasons why a business or store experiences overstock inventory. Fortunately, most of these causes can be avoided with more careful calculation, planning, and inventory analysis.

Misjudgment of Customer Request

The most common cause of overstock inventory is that business owners tend to misjudge the behavior of their customers. Many business owners are facing the problem of an information deficit regarding their customer behavior, especially due to the COVID-19 pandemic that has restricted in-store purchases. Misunderstanding customer demand for a product can lead to overstocking of items at relatively high prices and eventually just stuck on your inventory shelves.

Fear of running out of stock

In addition, business owners are often afraid of running out of stock and not being able to serve customers. When stores run out of stock, or when supplies are limited due to lack of stock, the impact will be bad and they may lose customers. This is what causes business owners to worry too much about running out of stock and tend to overstock.

Ineffective Marketing Strategy

Marketing can be a powerful tool for engaging customers and promoting your business. But when store owners rely too much on marketing alone to drive sales of a product, this can cause problems. If you buy goods in bulk from your suppliers, don't assume that your customers want to buy them just because you have an attractive marketing strategy. This is what makes business owners feel confident the level of sales will be high and makes them overstock. Customer behavior and previous sales data should be considered when you are going to buy goods from suppliers and resell them.

Poor Inventory Management

Focusing on inventory and on-stock items is essential to running your business today. Inventory costs should also be a major concern when considering how you will be successful in reducing excess stock. Unfortunately, the lack of understanding of this important aspect of inventory management is another cause of overstock inventory in a business.
If you don't know how much inventory costs including the cost of holding your products, then you're more likely to buy new inventory without accurate data showing your profit margins and cost of goods sold. This information is actually the key to starting proper inventory management and avoiding overstocking.


Almost all industries are affected by some kind of season, whether it is the holiday season, holidays or otherwise. Usually to get big profits, business owners will increase their product inventory in anticipation of explosive sales in a season. The reality is that many stores or businesses don't really understand and have data about seasonal sales. Unprepared stores, unable to strategically set prices during seasonal purchase deadlines, and most of them do not utilize multiple channels to promote and sell their products as a result many products are unsold and stores are overstocked.

What Can Business Owners Do to Overcome Inventory Overstock?

If your business is experiencing overstock inventory, there are several steps you can take to overcome it. Here are some of them!

Liquidation Sales

Liquidation sales are one way to deal with excess inventory. Liquidation itself is an effort to sell company assets or inventories to get their capital back or cover losses or debts owed to creditors.

For business owners, liquidating this inventory is a good way to clear shelves and open up space for new products. Items that are stored in the warehouse for too long will certainly become dusty and obsolete. That is why many large business owners or retailers you know will likely liquidate their excess stock to recoup some of their losses. If you want to do liquidation, you can do some research first. You can look for websites that will direct you to a trusted liquidation site and find the right supplier.

Online Auction Market

In addition to liquidation, there is another way that small business owners can do to reduce excess stock, namely by auctioning goods in excess stock. You can take advantage of the auction market to sell your products that are not selling well in the market, of course, at a lower price. This auction marketplace can be customized, integrated, and scalable based on the needs of each business owner. The auction market also functions like your own storefront that can be used to resell, excess inventory that you have. You can control who you sell it to and at what price you agree to sell it.
Currently, business owners can also create online stores in the marketplace to place items to be auctioned so that buyers can buy them directly. This method is considered effective for reducing excess stock, getting capital back, and introducing these goods to the secondary market.

How Can Online Auction Markets Solve Overstock Problems?

Maybe you are still hesitant to auction your product but you can convince yourself by knowing how the online auction market can be successful in reducing excessive stock.

Higher Price

If done right, the auction market can offset substantial losses to overcome excess inventory, it can even cover the costs of procuring products or shipping you make from your vendors. Make sure you find the right market and get the right price.

Control Who Can Buy

Control who can see and buy your excess inventory by marketing it to a database of verified secondary market buyers. Offering products to the right buyers ensures there is no confusion between sellers and buyers and protects your brand.


You can quickly manage inventory turnover if you auction excess product stock as needed. To do so, you just need to find a large buyer base and sell them in large quantities and at the right price.


Increase the operational efficiency of your liquidation or auction program by automating your liquidation process. No more spreadsheets, emails or phone negotiations and more. You can use the right software or platform to automate the process.
There are many platforms that can help you manage your inventory and returns more efficiently. ReturnKey is a platform that is ready to help your business profit and grow your brand and provide the best service to customers.

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