Overstocks

 

 

        Overstocks: 

                            Excess inventory used to fill gaps in the retail supply chain. Their are two major groups of overstocks.

 

                   1. Seasonal overstocks:

                                                        Seasonal overstocks are products sold at definite points during the calender year. This occurs in most part by Hollidays and change of weather . Summer clothing, Winter Clothing, Christmas decorations, Holloween coustumes, heaters, air conditioners, snow blowers are examples of seasonal overstocks. Overstocks are neccessary and bennificial to both the supplier and Major retailers. The overstocks are produced by ordering more seasonal merchandise than a retailers sales estimates forecast. The increase ammount of product is necessary to fill in gaps in the retail supply chain to maximise sales of a product.. Since the product has a psuedo-expiration  date ( the date of holliday or change in weather) the retailers distribution centers have a supply of a product to send to the Retailers stores that are close to running out of the product. This overstock in the retailers distribution center garuantees maximum sales of the product during the season. This maximisation of sales is bennificial to both supplier and retailer.

               2. New Product Line overstocks:

                                                                  New product line overstocks are produced by non-performance of a new product. The new product line has no real market sales data to give an accurate sales projection estimate. If the product does not have good sales the retailer will remove the product from their valuable floor space. This produces Non Proformance Overstocks. Non-performance overstocks can be classified as closeouts or clearance product lines.

 

Related Topics:

 Closeouts

 Clearance inventories