How to Negotiate a Low Price for Leftover Stock
Businesses might face excess inventory or stock even after good sales for many reasons, such as mass inventory, bulk supply, or if target sales are not reached. This scenario would result in the disposal of stock as manufacturers want to eliminate that surplus stock that will not be used for the next 12 months. This situation is a massive disadvantage to businesses as they face a waste of resources.
To save the disposal of the stock and earn some revenue from that dead stock and reinvest it into the business rather than just disposing them of business could sell it to any consumer. Because this stock will be a leftover so the consumer buying the portion would have some conditions
Why or how will a consumer negotiate for a low price to buy the leftover stock?
Quality of the leftover
When a consumer spends a considerable chunk of his income on buying a stock, he will find the best quality he could find. But as far as leftovers go, these products are not sold even during the expected season. There will be questions about the portion’s quality when he sees the specific product not sold. This point will give consumers a penalty to negotiate for a low price from the seller. A seller could buy these products at a discount by having the issue of low quality in negotiation. This point will help the consumer to buy the stock at the right price.
The stock could face depreciation.
No matter if it is a product or an asset, the product or asset will lose its value as time passes. For example, a car was used for about six months. After six months, the worth will not be the same as before, so, This situation will result in a reduction in the price as the worth is direct to the price. Here the consumer got the point to negotiate for a low cost as he could say that the stuff I am buying is dead and out of trend. So why should I buy something at such a high price that’s not going to be profitable for me? As manufacturers are afraid of holding leftover stock. So, consumers are on benefits.
The stock that’s out of trend, and there is no demand in the market.
As we know, the market is a place of changing trends. You never know when the demand for a specific product will decrease. If the stock is out of trend and the need for that product is significantly less, the buyer will have an edge here that he could enjoy a considerable discount. The seller also knows who will buy a dead stock so that the prices would be minimum, and discounts on those would be an advantage. For example, in 2017, there was a rising trend of funky jackets, but denim jackets took over, so the demand for funky jackets automatically decreased.
Defected products in the stock
There are vast chances of defective products when someone is buying bulk. For example, in many cases, shoe manufacturers sold only right-foot
sneakers. So there is a risk when purchasing leftover stock that products could be defective. Defected products are also a huge reason to worry as the buyer must spend considerable money to buy the stock. So, because of the risk of a defective stock, the buyer can negotiate a suitable price.
How much is a good discount?
When deciding on a discount, the first essential thing is how much quantity you are buying, in which season you are buying, and what kind of product you are buying. When purchasing a bulk amount of leftovers, there are a lot of risks a buyer could face that we have discussed in the article above. These all factors prove that the consumer must have the best possible discounts. When a seller sells stock of leftovers, he just wants to get rid of it because it is dead stock, and he is not expecting any profit from it. You should have noticed that when the summer season is going on, most brands offer above 50% discount so they can buy or stock articles for winter. The buyer must negotiate a low price to buy the leftover stock.
But the situation varies within the products. For example, if a buyer purchases a surplus supply of clothes, he could have a discount of 50% and a maximum of 70%. In this margin, the seller could achieve breakeven, and the buyer will have stock at the best price. As we discussed that prices and margins vary between different products, we can take an example of the fruits industry. This industry is a low-margin industry. If a fruit seller wants to get rid of the fruit stock and the seller is interested in buying the store as he wants to preserve the fruit for smoothies, shakes, juices, e.t.c. He could only have a minimum discount of 20% and a maximum of 35% as this business is a low-margin industry.
How businesses can best utilize their leftover stocks
Here, we are describing the whole mechanism through an example. Jiffy stock is an affiliate company that has proved its most creative approach and marked its position among the top online shopping platforms.
First and the unique primary approach is their auction update. An auction is a way through which a seller can sell its product to the most interested buyer(highest bidder) at a rate ideal for both sides. Once the season is over, sellers can auction their leftover stocks to avoid losses. The buyers interested in bulk supplies or low prices can avail themselves of these opportunities.
Typically other online shopping platforms don’t provide this facility to users, which sometimes can cause a significant setback to the businesses over there. Even local companies use these auction mechanisms, but their reach is significantly less. So once again, this platform has provided an extraordinary feature along with many others like:-
- Accepting payments in crypto
- Shipments through the most reliable shipping companies all over the world to avoid inconvenience or mismanagement in this regard
- Providing reach to the large target audience
In the end, an excellent discount to buyers will help the stock keep moving from warehouses and allow businesses to save their resources.