The 3 Easiest Ways to Reduce Excess Inventory

Tuesday, July 14, 2020 8:00:00 AM

Categories: Inventory Management

By Mark Tomalonis
Principal, WarehouseTWO, LLC

Does your company own any inactive, excess or “dead” inventory?  Stop stressing out about it:  surplus inventory is merely unproductive cash taking up precious warehouse space.

Then again, maybe you should stress out about it a bit.  To help alleviate that stress, here are the 3 easiest ways to reduce excess inventory at your company.

#1.  Prevention

Manage your inventory better.  Avoiding the creation of future excess inventory is by far the best way to reduce excess inventory.  Start by giving the responsibility for inventory management to intelligent, well-trained, well-paid people.  Then give them the authority to impose inventory management “best practices”.  Give them the tools to achieve their goals, such as a modern ERP software system.  Read these helpful articles relating to excess inventory prevention:

Why Your Inventory/Purchasing Manager Should be the Smartest Person in the Room

How NOT to Get Stuck with Inventory Stocked for a Single Customer

Before an Inventoried Item has a Birthday...

#2.  Throw it Away

This is really easy:

Step #1:  Rent dumpster.

Step #2:  Fill dumpster with excess inventory.

Step #3:  Empty dumpster into big hole in ground.

Step #4:  Repeat steps 1-3 as needed.

Just do it.  Take the tax write-off.

Then, learn from your mistakes.  And deploy preventative processes and policies to avoid these same mistakes in the future.  Here are two articles about learning from past inventory management or purchasing mistakes:

How to Learn from Your Surplus Inventory "Backstories"

5 Tips on How Not to Repeat This Year’s Inventory Write-Off Next Year

Incidentally, I consider selling your excess inventory for pennies on the dollar to a scrap dealer or to a surplus dealer to be two variations of “throw it away”.


The #3 easiest way to reduce excess inventory is...

(click here…)

About the Author
After a successful career in sales and operations management in the wholesale-distribution industry, Mark Tomalonis is now principal of WarehouseTWO, LLC.  He amuses himself by writing articles, such as this one, to help wholesaler-distributors execute their operations better.  Mark’s articles and tips are published in WarehouseTWO’s monthly e-newsletters.  Click here to subscribe.

About WarehouseTWO
WarehouseTWO, LLC is an independent “inventory-sharing” service created exclusively for durable goods manufacturers and their authorized distributors, and for any group of durable goods “peer” wholesaler-distributors, such as members of a buying/marketing group or cooperative.  To learn how inventory-sharing with WarehouseTWO can help your business, visit the WarehouseTWO website, or email