Issue link: https://www.e-digitaleditions.com/i/655792
March/April 2016 45 side to the project. A few well-placed tombstones would not be out of order. Who says you can't have fun in the warehouse? If you are anything like me, this next suggestion will reso- nate. I hate to lose money. When we are selling a stinky dead item, our fi rst inclination is to give a discount so that it will disappear. Remember, we have already accumulated an addi- tional 25 percent in carrying cost. I'm no math major, but if we bring the sell price down and our costs have gone up, this ain't good. Perhaps we need to give ourselves a fi ghting chance at some cash. My suggestion is that you jack up the price on any dead item by 300 percent. Since we are going to give some- one a discount anyway, why not start from the highest point? When someone calls, do you really think that we are the fi rst person they have tried? We have it, the previous fi ve distribu- tors didn't. Gotta love supply and demand. Managing the Dead The fi nal step is to turn the list over to the mortician. Hire a dead stock manager to liquidate your dead inventory. Wait a minute, doesn't this sound like throwing good money after bad? If you structure the position right, it will be a positive contributor to your bottom line. Look for a part-time employee for this position. I happen to like retirees for this job. Pay the person a commission on the dollars recovered—not on gross profi t dollars. We are probably going to be selling things below what we paid for them. I have seen commission ranges from 25-50 percent. Do what works for you. The sole mission of this individual is to make our inventory obituary disappear in 30 days because something new will die every month. A consistent running of the inventory obituary will yield tremendous bottom line results. At the beginning, the list will seem like an insurmountable task. Over time, and the efforts of a diligent dead stock manager, the list will reduce to an acceptable level. If you need some suggestions on methods of dead stock disposal, please feel free to contact me or look for articles on our website. Purchasing your distribution software was a signifi cant investment. The return on that investment is up to you. Good luck. About the Author Jason Bader is the managing partner of The Distribution Team, a fi rm that specializes in helping distributors become more profi table through strategic planning and operating effi ciencies. The fi rst 20 years of his career were spent work- ing as a distribution executive. Today, he is a regular speaker at industry events and spends much of his time coaching individual distribution companies. For more information, call (503) 282-2333 or contact him by e-mail at Jason@ Distributionteam.com. Also visit The Distribution Team's website at www.thedistributionteam.com.