Overstock / Obsolete Inventory

Tips for Managing Excess Inventory, Obsolete Products, and End-of-Life Parts.

The implications of managing excess inventory have changed over the years. Excess material from end-of-life products, different programs, or cancelled orders can often be placed in overstock or remote areas of the stockroom. Decisions may be made to sell or scrap excess items to customers, independent distributors, or even used equipment brokers. Some of the options for handling the excess inventory include consignment, heavy discounting, barter or trade, outright sales, or donating to a qualified source for a tax beneficial reason.

New old stock (NOS), is an acronym for “new on the shelf”, “new old stock”, or
“new off the shelf”, and refers to obsolete equipment, or original parts
(components) for obsolete equipment, that have never been sold at
retail.   The term refers to merchandise being offered for sale which
was manufactured some time ago but that has never been used. Such
merchandise may no longer be produced, and the new old stock may
represent the only current market source of a particular item.

While damage or loss to the original packaging is common, damage to the
product contents is generally not.   Most NOS items have been on shelves
or in storage and are still in “like new” condition.  Shelf life
usually does not detract from spring contact or test probe performance,
and an item being identified as NOS does not detract much from it’s
value.

Here’s a closer look at each of the typical options for dealing with excess inventory of all types:

Consignment allows you the opportunity to keep track of excess material either at your facility, or another site (customer?).  The product could be consumed while in consignment, or you can still sell it when you want to through your independent distributors, or on the Internet for sale. The disadvantages of consignment are that you must respond to sales quickly when someone in your channels sells the parts, and delays in delivering consigned parts could cause unforseen interruptions to your business. What’s more, you could lose the sale if you don’t respond in a timely manner. In addition, you must update the channels frequently on inventory levels due to changes in parts status.

Outright sales through discounting or special price offers has been a popular way for most companies to dispose of their excess in the past.  This method offers a fast and convenient means for selling a large lot of excess product.   The challenge is in finding customers who need the product, and timing.   It may take some time and effort to sell the product in this manner.

Donating to a qualified source for a tax benefits, is much like outright sale or trade, however, : only a small percentage is generally offered for the lot of excess product because its value is unknown.

Auctioning may offer the most convenience, and best bang for your buck. Generally speaking, you generate a list of parts, with quantities and standard cost, and allow bids on the lot. The drawback is that you can only guess on the forecast sale value of
the lot, and may only receive a small percentage of the value of the
lot.  However, adding your products to a focused marketplace such as Springcontacts.com, provides excellent visibility to a large pool of ready buyers.

Visit our Auction Page to see products being offered, and Register as a Seller To get started!