You're faced with excess inventory. How do you decide which items to liquidate first for maximum profit?

In India, as we are in the realm of Amazon's Great Indian sale/Flipkart BBD sale, here's how the e-com giants do, 1. FMSN Classification: You can see how a Google Pixel 7 got discounted to its all-time low after the new 9 launch. So, these products were heavily discounted to clear storage space, making room for higher-demand items. 2. Value Assessment: I’d target Slow-moving High-Value items, like electronics or appliances, with slower sales. Just like Amazon/Flipkart offers deep discounts on these items during their sales promotions on high-value products to attract buyers while still getting a decent return. Remember, the goal is to free up space, clear excess stock, and maintain profitability—all while appealing to the customer base!

Prioritise identifying excess inventory by running reports to identify other hospital pharmacy sites that can utilize ‘dead stock,’ ensuring it gets redistributed efficiently. By leveraging central inventory management practices, we not only reduce overstock but also maximize profitability by aligning stock movement with demand across multiple locations, ultimately minimizing waste and optimizing resources.

Differentiating between products that generate sales volume and profit margin is key to strategic inventory management, especially when some excesses or products have become “dead” inventory. To define an effective commercial or shrink prevention strategy, several aspects must be considered: Volume-generating products: These are sold in large quantities, but tend to have low profit margins. Margin-generating products: Products that, although sold in smaller volumes, have a high-profit margin. Dead inventory management strategies: Inventory segmentation. Selective discounts. Sales channel optimization. Proactive shrinkage management. By reducing the financial risk of holding excess inventory, both revenue and profit margins are maximized.

To decide which items to liquidate first, I apply ABC analysis to categorize inventory by value and turnover. I prioritize liquidating slow-moving or obsolete items with lower demand and high holding costs. By focusing on aged stock and aligning liquidation with market trends, I aim to maximize profit while freeing up space for high-performing products.