How to Sell Excess Clothing Inventory

01 Mar 2021
How to Sell Excess Clothing Inventory

Fashion is an ever-changing industry and with every new trend, season, and sale comes excess inventory. This is something that all clothing retailers are familiar with. Some items fail to sell well because of their style, size, or price, but there are many other factors that go into an item doing well.

Placement on your retail floor and the general trends in the fashion world all dictate how your items do. This excess merchandise can be expensive to deal with; for example, leave it in warehouses and storage, and it takes up valuable space that you’re paying for. Employees having to sort through it and organize stock takes up labour, which is an added expense. Lastly, if you decide to get rid of it through donation, then you’re taking on losses.

All these options are costly, bad for cash flow, and not the most efficient strategy to tackle the problem. The best solution is to sell excess inventory, and there are many methods to do so. Here are some ways to sell your excess clothing inventory for the maximum profit.

What is excess inventory?

Excess inventory is the stock that hasn’t sold out at the end of the product cycle. This surplus usually happens when the orders haven’t been organised to properly forecast the expected sales and demand. Other things to consider when placing an order is if the items will do well, their quality, size, price, etc.

When too many items have been ordered, retailers end up with overstock products. Sometimes, the reasons for surplus inventory are out of your control. These might include canceled orders, weather changes, or fluctuations in the economic market.

Clothing inventory is slow moving, and because you’re making losses in storage, it’s best to sell it to improve the overall profitability and organization of your business.


A popular way to sell excess inventory of clothing is through a liquidation service. Liquidators will buy your excess clothing inventory straight from you, and then deal with selling the stock themselves.

This saves you transportation fees or any organizational hurdles in finding buyers, warehouses to sell in, etc. However, before you enter into an agreement with a liquidator, make sure you know the value of your merchandise. This can save you money and ensure you get a fair price. Also, be careful when choosing a liquidation company: good liquidators will get you the best price for your items, as well as sorting out logistical issues for you.

Third-Party Websites

Some wholesale liquidators will accept your items only if they are of a certain quantity. If you don’t have enough stock to liquidate, consider selling your old inventory online. Third-party websites like Amazon, eBay, and Kijiji are great channels to reach new customers. This solution is perfect for smaller scale retailers to drive more traffic to your store and enlarge your customer base.

Keep in mind that online channels are plenty, and there is heavy competition amongst retailers. This may require you to lower your price to attract customers, which can be unprofitable for some items. You also have to sell in accordance with the policies of the third-party vendor, which can include some fees as well. The biggest disadvantage of third-party retailers is that they require a lot of work to make profits—product pages need to be created, as do descriptions, photographs, and internal storage until the stock is sold.

Discounts and Sales

Another solution to boost sales is to offer great discounts or recurring sales. Overstock is more easily sold when steeply discounted, and our team of experts has found that a 40%–70% discount is best to drive sales effectively.

You do need to have a strategic approach when it comes to discounting items because if not accounted for, you could take on heavy losses. You’ll be paying for the original item, the cost associated with labour and storage, as well as further reductions in price.

Some effective strategies are:

  1. Clearance sale. These large sales happen a couple of times a year and are great for attracting new audiences with the cheapest prices you can offer. This is an effective solution because most stock will get sold quickly, even if at a low cost. So, if your aim is inventory management, then this is a great option.
  2. Seasonal sale. With every change in product line comes a seasonal sale. Some shoppers specifically look out for seasonal sales to get a head start on next year’s shopping. Items in this sale are low, but can be higher than clearance sales, thus making you a little bit more profit.
  3. Flash sale. This sale type places a sense of urgency in buyers because it creates a feeling of stock being in high demand or selling out. If the anticipation is built up with proper marketing, buyers will be willing to spend a little more for the right product.

Incentivizing Sales

An alternate strategy is to make a loss on the current item, but potentially ensure profit on the next one. This incentive strategy works by gifting the excess stock to customers in different situations. This acts as brand-building: customers establish you as a trust-worthy source and have a general feeling of good will towards you. Freebies also bring in new customers with referrals. Some examples are free gifts for first-time customers, or a buy-one-get-one deal. While this method won’t bring you much profit, it can help drive future sales and increase customer loyalty. It is an effective strategy for brands that are trying to get their foot in the market.

These are some ways to sell excess clothing inventory. There are advantages and disadvantages to each strategy, and they may be personalised to suit your needs. Liquidation is a great solution to recover the value of excess merchandise with minimum effort and maximum profit.

To get a liquidation quote or find out more, call Michaels Global Trading today at 888-902-7531 or contact us here.

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