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BFS Capital Blog

How Your Business Can Maximize Unsold Merchandise

May 18, 2017

Did you know that nearly 21 billion pounds of textiles end up in landfills each year? These discarded textiles sometimes include new merchandise that retailers threw in the garbage. And while some of the big box retailers like big boys like Macy’s and Target can afford to do that, your small business most likely cannot.

So how can you take advantage of the inventory that your business didn’t sell? Here are some useful tips to help your business maximize its unsold inventory.

Bundle Your Unsold Inventory with Top-Selling Items

So maybe that line of Guy Fieri hand soap didn’t sell quite as well as you’d expected. Just add it to a package that includes Guy’s cookbook and a couple of paring knives. Now you’ve got a great Father’s Day gift pack for dads who like to cook. Get creative with how you bundle your unsold inventory with your top selling products, give it a decent markup and you can probably break even on the unsold items.

Discount Your Unsold Merchandise

If you’ve ever had a teenager with access to your credit card, you know the logic many people have of spending money to save money. So maybe those $100 jeans you were selling didn’t do so well; but when a customer sees they can save $50 by spending $50, those jeans become a “can’t pass it up” bargain all of a sudden. Clearance markdowns aren’t exactly a groundbreaking solution, but it’s still one tactic that many small businesses sell short.

Return Your Unsold Inventory

Though your vendors aren’t necessarily the customer service counter at Nordstrom, if you negotiate the right deal often times you can have stipulations for returns of unsold merchandise. It may not be at 100% of what you paid, but run the numbers to see if this makes more sense than deeply discounting the unsold items.

Keep It Until Next Season

Consider keeping your unsold inventory until next season but use common sense. Your unsold “Seattle Seahawks Super Bowl Champions” shirts from last year probably weren’t selling like hotcakes this year. However, items that will not go out of fashion or become outdated can be perfectly good a year later. Make sure you calculate the cost of storing them, though. If you’ve got space, it’s a great idea to stockpile your unsold merchandise but don’t do it at the expense of stocking newer items that will sell.

Use Unsold Inventory as an Incentive

You ever see those signs at the checkout stand that say something like “Check in on Facebook, get a free vegetable peeler!” That’s not because they want to make sure you are peeling your vegetables with maximum efficiency. It’s because they had a bunch of peelers that they hadn’t sold and decided to get creative. You can also use this as a spending incentive (Spend $100, get a free tote bag), a loyal customer reward (free pound of jalapeno coffee when you buy ten espressos), or a referral reward (bring in a friend and get a free box of peanut brittle!)

Give Unsold Inventory Away as a Promotion

We know this sounds counter-intuitive but hear us out. If you’ve written off ever getting a return on your unsold inventory, then consider setting up a “Free” rack inside your retail storeand use it as a promotion. While you may not get all of your money back, it’ll at least get people into your store who will more than likely buy something else. And it may help create word of mouth and social media buzz about your business, as well as creating goodwill.

Liquidate Online

There are companies – most notably – that act as an online consignment store that’ll take your unsold merchandise and sell it for you, typically to other retailers looking for merchandise. They’ll take a cut, but can typically unload most of the stuff for you without you really having to think about it.

Sell in a Marketplace

If you’re not already selling stuff on eBay as well, you should be. It’ll move on-hand merchandise without much additional cost, and it is an incredibly effective way of moving items that don’t sell in your store. Yes, eBay may be seen as America’s garage sale. But it’s also America’s online factory outlet center, so make sure you’re using the right keywords to drive people to your products.

Donate Your Unsold Merchandise 

Like with anything, there are serious tax benefits to selling off unsold merchandise. You can’t deduct “Cost of goods sold” from your taxes, but donating unsold items allows you to write off the cost of those too. A lot of retailers shy away from this because it hurts the brand image when customers can just pick up that $50 t-shirt for a dollar at Goodwill, but that’s a branding decision you’ll have to make for your small business.


There are companies out there who take unsold merchandise and send it to developing countries or turn them into other things like car wipes and home insulation. This actually accounts for the end product of roughly 2.5 billion pounds of clothes every year, and is a great way of keeping unwanted clothes out of landfills.

Barter Your Unsold Goods

The bartering industry is still alive and well, believe it or not. They’ve even got their own trade organization – The International Reciprocal Trade Association – who reported that 8.6 million B2B bartering transactions took place in 2013. Which means you could potentially trade, say, unsold towels to a hotel in return for hotel stays. Or unused shampoos and soaps to a spa for treatments. It might not be getting cash, but it’s at least getting something in return for items you might otherwise toss.

It’s unfortunate but, at times, you have to decide what you do with your retail store’s unsold merchandise. Hopefully, these tips will give you a few ideas on how you can get creative to maximize your unsold inventory.