All hardware stores carry slow moving hard-to-find products, it's part of the allure of a good neighborhood hardware store. However, there comes a time when the cost of carrying these items exceeds any expected benefit. Our customers will tell us when it's time to start closing out a SKU—when an item hasn't sold in two years then it's time. We call these SKUs obsolete. In Mango, obsolete inventory along with overstock (SKU's that do sell but have a two-year supply or more on hand) make up your unproductive (Productivity Level 0) metric. For an optimized inventory mix, unproductive inventory should make up no more than 7% of your store's total inventory value. Mango's monthly closeout management process helps keep your unproductive percentage under this target by identifying obsolete SKUs then intelligently managing their markdown strategy. Read more about Unproductive Inventory (Productivity Level 0).

• Many people are concerned about "loss" associated with closing out obsolete inventory, but the benefits are worth it:
  • Closeout Management works on inventory that has not sold in over two years; the cash outlay (or loss) was incurred at the time of purchase—over two years ago.
  • Because it is not reordered, there is a cash gain when closed out product sells.
  • When product is removed after not selling, an inventory loss is incurred which increases cost-of-goods sold and reduces gross profit; this reduces tax liability.
  • Your customers will find some great deals while walking your aisles—no advertising expense incurred.
  • Customers pay you to remove obsolete inventory from your store.
  • Less investment in obsolete inventory means more opportunity to invest in good-selling inventory.
  • Less obsolete inventory means a more convenient, relevant and clutter-free shopping experience for your customers.
  • Less obsolete inventory improves operational efficiency by reducing the number of items to price, clean, front, locate, count and move.