Overstock

Overstock is typically a product that is selling in your store but you just happen to have an overabundance of it. The goal here is to reduce the amount of inventory that is tied up in these SKUs through dynamic promotions, temporary sales, or strategic clutter. The steps below outline a rough idea of what can be done with these SKUs but allow yourself to get creative. The Overstock report selects items in all stores with at least two years of expected supply on hand. These items do not have recent purchase history (to exclude upcoming promotional or new items) or oversupply caused by a high order multiple. Furthermore, Peer data is used to exclude SKUs which exhibit peaky demand. What we are left with then is a list of SKUs which have a high inventory value (QOH x Average Cost) and a low probability of selling down to a reasonable inventory level anytime soon.

  • 2 important columns

    • G - Chain Carried %: the percentage of stores carrying the SKU (i.e. 3 of 4 stores carry this SKU, 75%)

    • H - Chain Overstock %: the percentage of overstock in stores carrying the SKU (i.e. SKU overstock in 1 of 3 stores, 33%)

      1. Enter the SKU into Inventory Maintenance (IMU).
      2. Determine if this is a product you want to continue carrying; if NOT skip to Step 7.
      3. Great, you've decided to continue to sell this product even after the overstock is gone.
      4. Determine a clever way to sell this SKU. Ideas include:
        1. Dynamic Promotion: Buy 1, get one half-off.
        2. Dynamic Promotion: Buy 2, get one free.
        3. Temporary Sale: mark it 50% off for the month.
        4. Strategic Clutter: fill an endcap or table or clip strip, make a sign, price it to sell.
      5. Determine the promotion that best fits the product and your store. 
      6. Set up the promotion and let it run.
      7. If the product does not sell as anticipated then you can try another promotion strategy (Step 4 above) or consider closing it out:
      8. Change the Store Closeout flag to "Y".
      9. Change the location to DR and the year you dropped the SKU (DR24 <-- 2024).
      10. Black out the UPC with your giant Sharpie.
      11. Manually price the items and a good initial discount.
      12. PIP the SKU to 0 (your store might have a closeout Shrink Type).
      13. Put it on your Closeout table.

    • Sort Column G and H

      MEGA Report Overstock Column G and H

    • G - Years of Supply on Hand: 999 is the result of this product not selling in an entire year or never before.

      H - Chain Carried %: the percentage of stores in the chain carrying the SKU (i.e. 3 of 4 stores carry this SKU, 75%).

      I - Chain Overstock %: the percentage of overstock in stores carrying the SKU (i.e. SKU overstock in 1 of 3 stores carrying, 33%).

      N - OP: The Order Point of the SKU.

      S - Ext Avg Cost: This the SKU's quantity on hand or QOH (column M) multiplied by its Average Cost (column Q). You can format this column as currency in Excel for better readability. Your list is sorted by this column in descending order to show the most impactful SKUs first.

      T - Last Physical: This is the last date the SKU was counted. These SKUs appear as a XX (double X) count type in your monthly Mango Count Sheets. As your store processes its Count Sheets, the physical existence of these SKUs in your store.

      U - Collection: indicates if this SKU is part of a collection of SKUs like numbered drill bits, sockets, O-rings, etc. These SKUs may be part of a fixed assortment and therefore may not be good closeout candidates. You can filter on this column to exclude these SKUs.

      W - Class: the Product Class that the SKU is in.

      X - Store Closeout: indicates if the SKU's Store Closeout flag has been set.

      Y -Discontinued: indicates if the SKU has been discontinued by the warehouse.

      Z - Promo: shows the SKU's current promotional price.

    MEGA Report Overstock

  • 2 important columns

    • G - Chain Carried %: the percentage of stores carrying the SKU (i.e. 3 of 4 stores carry this SKU, 75%)

    • H - Chain Overstock %: the percentage of overstock in stores carrying the SKU (i.e. SKU overstock in 1 of 3 stores, 33%)

      1. Enter the SKU into the Products Menu.
      2. Determine if this is a product you want to continue carrying; if NOT skip to Step 7
      3. Great, you've decided to continue to sell this product even after the overstock is gone.
      4. Determine a clever way to sell this SKU. Ideas include:
        1. Dynamic Promotion: Buy 1, get one half-off.
        2. Dynamic Promotion: Buy 2, get one free.
        3. Temporary Sale: mark it 50% off for the month.
        4. Strategic Clutter: fill an endcap or table or clip strip, make a sign, price it to sell.
      5. Determine the promotion that best fits the product and your store. 
      6. Set up the promotion and let it run.
      7. If the product does not sell as anticipated then you can try another promotion strategy (Step 4 above) or consider closing it out:
      8. Change the Store Closeout flag to "Yes".
      9. Change the location to DR and the year you dropped the SKU (DR24 <-- 2024).
      10. Black out the UPC with your giant Sharpie.
      11. Manually price the items and a good initial discount.
      12. PIP the SKU to 0 (your store might have a closeout Shrink Type).
      13. Put it on your Closeout table.

    • Sort Column G and H

      MEGA Report Overstock Column G and H

    • G - Years of Supply on Hand: 999 is the result of this product not selling in an entire year or never before.

      H - Chain Carried %: the percentage of stores in the chain carrying the SKU (i.e. 3 of 4 stores carry this SKU, 75%).

      I - Chain Overstock %: the percentage of overstock in stores carrying the SKU (i.e. SKU overstock in 1 of 3 stores carrying, 33%).

      N - OP: The Order Point of the SKU.

      S - Ext Avg Cost: This the SKU's quantity on hand or QOH (column M) multiplied by its Average Cost (column Q). You can format this column as currency in Excel for better readability. Your list is sorted by this column in descending order to show the most impactful SKUs first.

      T - Last Physical: This is the last date the SKU was counted. These SKUs appear as a XX (double X) count type in your monthly Mango Count Sheets. As your store processes its Count Sheets, the physical existence of these SKUs in your store.

      U - Collection: indicates if this SKU is part of a collection of SKUs like numbered drill bits, sockets, O-rings, etc. These SKUs may be part of a fixed assortment and therefore may not be good closeout candidates. You can filter on this column to exclude these SKUs.

      W - Class: the Product Class that the SKU is in.

      X - Store Closeout: indicates if the SKU's Store Closeout flag has been set.

      Y - Discontinued: indicates if the SKU has been discontinued by the warehouse.

      Z - Promo: shows the SKU's current promotional price.

    MEGA Report Overstock