Excess Inventory

Excess Inventory

Also referred to as surplus inventory, denotes the surplus stock held by a company beyond what is necessary to meet demand and safety stock requirements.

While maintaining a certain level of excess inventory can serve as a buffer against unexpected spikes in demand, excessive surplus inventory can pose significant challenges for businesses. These challenges include increased storage costs, tied-up capital, risk of obsolescence, and potential disruptions to cash flow and operations.

Related Terms

Prestige Pricing

A pricing strategy where products are priced at a premium to signal superior quality and status,

Blocking

Also called facing, zoning or fronting, a retail merchandizing concept where all products of the same

Frequent Buyer Program

A customer loyalty scheme designed to incentivize repeat purchases by offering rewards based on the accumulation