It is a commonly accepted thing that having excess in your inventory is bad. There are many reasons for this. One of the simplest things would be that you would be wasting your money. That is to say once you spend money on buying goods until that good is sold the value of your money is depreciating at the rate your goods are depreciating. To avoid facing this issue it is important that you realize what the root causes are for your inventory to have goods that are not selling. Until you identify them and fix them you are going to continue to face this issue.

Having discount sales on how to improve cash flow in small business is not really the best plan of action in the long run as you are simply slowly bleeding money. You need to put a stop to it. One of the biggest root causes is bad forecasting. That means that you end up buying a lot of a certain good expecting it to sell. This applies to items that are in trend or seasonal clothing. What you must realize is that some trends tend to die out soon. So unless you cash in on this rush when it happens you would only end up losing money. You need to be able to ascertain how long certain trends will last so that just as the trend comes to an end your inventory also dries up.

Now to make this possible timing is of the essence. So having bad suppliers who don’t deliver on time is equally bad. I mean I just mentioned that you need to cash in on trends at the right moment, so if your supplier only ends up delivering weeks after the trend is dead you are going to have a lot of your money tied up in a good you are not likely to be able to sell for some time. This same reasoning applies to seasonal clothing as well. You need to be able to calculate how much say for an example overcoats that you need to stock up on for the winter season. So if your forecast badly you would end up having to have slashed sales to sell excess stock, so be careful when you buy in bulk in advance and take care to have good suppliers of liquidate business inventory.

Another very common root cause is when you buy goods of a lower quality. If your goods are of a low quality obviously customers would be reluctant to buy your goods. They would only end up piling up. So make sure that you buy some quality products when you buy things. Not having a good system to organize your inventory can also lead to you having a large inventory filled with goods that you don’t really need and you can’t sell. In conclusion the solution to this problem is good management of your business and your inventory, and also the curing of the root causes that you could face. This is of course not an exhaustive list on things that could be causing the issue.