Got boxes of products gathering dust in your warehouse? You’re not alone. 

Even the best run businesses deal with surplus inventory at some point, and it can feel like watching money slowly drain away. 

The good news? There are proven ways to turn that dead stock into cash while preventing future pile-ups.

What Exactly Is Surplus Inventory?

Surplus inventory is simply products you can’t sell fast enough. They’re taking up space, costing you money, and tying up cash you could use elsewhere.

Common causes include:

• Overordering (we’ve all been there)
• Poor demand forecasting
• Market changes that caught you off guard
• Seasonal shifts or product updates

The real kicker? Carrying excess inventory typically costs 20-30% of its value every year in storage, insurance, and other expenses. That $10,000 worth of slow-moving stock could cost you $3,000 annually just to keep around.

Why Smart Businesses Have a Plan for Excess Inventory

Liquidation is simply turning your dead stock into cash. You cut your losses, free up warehouse space, reduce storage costs, and get immediate cash flow to invest in products that actually sell.

However, there are potential downsides to consider. Deep discounts can hurt your brand image, and some liquidation methods might upset your regular suppliers or retailers.

Be sure to work with a liquidator who will collaborate with you to find the best redistribution strategy for your products. Whether you prefer online channels, brick-and-mortar stores, domestic markets, or international outlets, you want to make sure they respect your preferences and restrictions.

When Should You Pull the Liquidation Trigger?

Don’t wait until products are completely worthless. Here are the key scenarios where liquidation makes sense:

• Overstocking situations – If something hasn’t moved in 3-6 months despite normal marketing efforts, it’s time to act.
• Product lifecycle changes – New model coming out? The old one needs to go before it becomes completely obsolete.
• Seasonal shifts – Winter coats in spring, Halloween decorations in November – you get the idea.
• Cash flow pressure – Sometimes you need money now, and liquidation is your fastest option.

Your Liquidation Toolkit: 10 Methods That Work

Few people like to deal with excess inventory, but when it happens, you’ll want options that actually move product and recover your investment.

• Flash Sales – Create urgency with limited-time offers. Great for moving inventory quickly.
• Online Auctions – eBay and similar platforms expose your products to buyers you’d never reach otherwise.
• Liquidation Companies – They buy your bulk inventory for a small fraction of its value. Low recovery but fast cash.
• Wholesale Buyers – Discount retailers and resellers often want consistent surplus sources.
• Bulk Discounts – Encourage larger purchases with volume pricing.
• Donations – Donations don’t mean instant cash, but talk to your tax pro about write-offs that could be worth more than selling. Plus, you help a good cause.  
• B2B Sales – Other businesses might buy what consumers won’t.
• Supplier Returns – Negotiate returns with your vendors when possible.
• Free Samples – Build brand awareness while clearing small quantities.
• Responsible Disposal – Sometimes, with damaged or obsolete products, your best bet is to cut your losses and dispose of everything properly. Save this for when nothing else works.

Ready to Turn Your Dead Stock into Cash?

Surplus inventory doesn’t have to be a business killer. Start with an honest assessment of your current inventory – identify anything that hasn’t moved in over 90 days and make liquidation decisions quickly.

Consider investing in better inventory management tools like our partners, Cin7, Katana and Brightpearl by Sage are all great examples. The cost is usually recovered within months through improved cash flow and reduced carrying costs.

Don’t tackle liquidation alone if it’s not your thing. Professional help often pays for itself through better recovery rates and faster results. The Charity Hub creates custom approaches based on what each business actually needs. Give us a shout if you want help or just need to know where to start.

Remember: every dollar tied up in dead stock is costing your business money. Take action today and turn that surplus into working capital you can actually use.