GPI 243 – Review inventory, sell it off the aging items and do not delay.

Your firm carries lots of money in inventory so if you do not have someone going through the contents, aging these items and analyzing what needs to be moved immediately, you deserve to go out of business.

Select the right detailed oriented personnel to review and move company inventory.  Give them the authority to move inventory at old pricing or special ‘one-time’ pricing in order to turn it into cash.  Do this now before it becomes worthless. Assign these people and allow them to do this on a regular basis regardless how emotionally attached some are to the 2 year old inventory that no one wanted to buy.

Sell existing inventory at the old price to give the buyer a break and to move it.  Give the buyer an opportunity to buy any items that your firm has in stock at the old price, but remind him future orders will be at new higher prices.  Give him a deadline and remind him diligently what is available for his needs.  If necessary, give him a piece price up to a hurdle volume that will cover the cost of setup, then a discounted price over a certain volume.  If desired, give him an extended period of time on these invoices in order for him to turn it to cash.  It is far better to do this than to have it sit and deteriorate in your warehouse.  Give your sales reps bonuses if necessary but turn these items into cash, reanalyze what you buy in the future and move on.  You wasted enough time on it up to this point.

Categorize your inventory by age to move it.  In order to decide the effectiveness of these people, make sure your entire inventory has been aged (date entered received/ purchased and placed into your warehouse) and demand to see everything over a selected cutoff (90 days, 120 days or you decide the drop-dead period for evaluation).  Make these company rules and stick to them.