How Can We Manage Inventory Accruing Interest?

 

Hi Sara,

We have some inventory sitting around that’s started accruing interest, which is eating into our profits. Do you have any strategies for managing or moving this inventory?

Thanks,
Mark from PowerPro Equipment

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Hi Mark,

Ah, inventory accruing interest—the ultimate dealership headache! When it comes to paying interest or making a buck, I’d say take the dollar every time (especially if you can keep getting more of that unit). You don’t want to pay banks for the privilege of holding onto inventory when you could be turning it into cold, hard cash.

The best way to move that inventory is to start with your existing customers – the ones who already like you, trust you, and have bought from you before. They’re usually the easiest folks to sell to because they know the drill. A quick 30-day email campaign promoting those units can work wonders. Many of our dealers in our pilot marketing program have succeeded with this. It’s as simple as sending out a weekly mass email, spotlighting a few units, and letting customers know they can bring an offer. Are all the offers good? Nah, but it starts the conversation, and that’s the first step to clearing out that inventory. (A fan fave for simple email marketing is Mailchimp, which you can sign up for here.)

You might also want to grab your customer list and look for those who have units reaching the end of their lifecycle. You know the ones—they’ve paid them off, the warranty’s expired, and the shiny, sexy new-factor is long gone. Give them a call or shoot them a text. They might just be ready for something new, and you’ll be the hero who saved them from their outdated equipment.

If you’re thinking, “This all sounds great, but who has the time?” – I hear you. We’ve recently launched a service where our team becomes your marketing manager, taking care of everything from moving inventory to looking over co-op agreements and everything in between. It’s not cheap, but if you want someone who really gets what it’s like in a dealership and knows how to market each department, we might be a great fit. Just shoot me an email, and let’s talk.

Happy selling,
Sara Hey

Sara@bobclements.com

P.S. Who doesn’t love an excuse to get rid of something old and upgrade to something new? Keep that interest off the books and those sales rolling in!