I’M GOING TO say something that goes against everything I have recommended for the past 20 years. For perhaps the first time in my life, I’m here to tell you that having too much inventory going into the holiday season might just be a good thing. The reason is that your inventory won’t spoil: It has no expiration date. Your inventory is now and will forever be a thing of value, whether sold, melted or traded. And, you own it.
The only time I’ve heard the quote, “We’ll live off the fat of the land,” was in John Steinbeck’s Of Mice And Men, which, ironically, dealt with life during the Great Depression. If there is any business to be in right now, other than surgical masks or hand sanitizers, it’s ours. The inventory you own will not be going out of style, and you can live off of it for the coming months.
You don’t sell meals at a restaurant or seats on an airplane; once their day is over, so is their opportunity. They will have a difficult time making up that business. But your customers are not going to stop getting engaged or married or celebrating events. Yes, everyone is stressed, but business has been steady as stores have opened up, and you will make up the lost revenue from the spring. You will have events again and celebrate with your customers.
I made this video several years ago that shows how to deal with your aged inventory through re-merchandising. I’m adding it here to show you that you can shuffle your inventory into different price points depending on what’s happening with the prices of metals and the perceived value of the inventory you own – which you should be living off of as things begin to get back to normal. instoremag.com/abeshermanvideo
Re-merchandise the inventory you have in your stores in price points where you need product anyway. Then re-assort and re-display your showroom and position the inventory you own. This is the time to live off of this inventory and to take converting it to cash seriously. I feel bad for the suppliers whom we also need to support, but if you need to generate cash, you have to sell down, not buy more — until you thin out the aged inventory and need to replenish with new. In the coming weeks and months, as things get back to normal, it would be good for you to be in the same frame of mind of keeping your inventory lean, but for now, let’s deal with all of that cash that’s tied up in merchandise so you’re in great shape in 2021.
This is also the time to remove much of the memo from your showcases if it is competing with your owned inventory — because when you sell it, you will create a payable. Sell what you own, and live off the fat of the land.
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