---
title: "How to Better Handle Excess Inventory After the Spring Festival?"
description: "After the Spring Festival, sales managers face the challenge of dealing with distributors' excess inventory. This article analyzes the causes of inventory buildup and offers four practical methods to clear it, including piggybacking on popular products, bundling sales, reverse price increases, and exploring alternative channels."
author: "崔自三"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2015-03-03"
language: "en"
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# How to Better Handle Excess Inventory After the Spring Festival?

> After the Spring Festival, sales managers face the challenge of dealing with distributors' excess inventory. This article analyzes the causes of inventory buildup and offers four practical methods to clear it, including piggybacking on popular products, bundling sales, reverse price increases, and exploring alternative channels.

Case: "Manager Zhang, before the Spring Festival, you urged me to pay and ship goods, and I basically did as you asked. Now that the peak season is over, I still have a large pile of product inventory, tying up a lot of my capital, and I can't even stock other products I represent. What should I do? You have to help me and make it right for me." After March, Li Ming, a sales manager for a liquor manufacturer, began receiving these "firefighting" calls from distributors. Indeed, after the Spring Festival, the peak sales season for liquor, how to handle excess inventory becomes a new sales challenge for liquor sales personnel. So, for alcoholic beverages, how can you cleverly deal with excess inventory during the product season transition?

Analysis: Handling excess inventory is a fundamental skill for sales personnel. If not handled properly, it can become a serious obstacle to cooperation between the company and distributors, affecting whether distributors will continue to order and cooperate. Therefore, how to cleverly manage inventory is a major test for both the manufacturer and its sales staff.

Generally, the reasons for inventory buildup are as follows:
1. Sales representatives, as the actual "operators," fail to reasonably estimate the "accurate" sales volume for the peak season, leading them and distributors to overstock out of fear of running out, resulting in excess inventory that cannot be sold during the peak season.
2. Some sales managers face excessive sales targets and, to achieve them, use various legitimate and illegitimate means to push inventory during the peak season, ultimately causing distributors to "indigest" the stock.
3. Some distributors, tempted by "small gains," blindly stock up when companies offer attractive promotional policies, leading to natural inventory buildup.

These are the three common causes of inventory buildup. Regardless of the cause, sales personnel must find ways to digest and handle the excess inventory. If distributors' inventory is not cleared in time, they won't reorder, the channel becomes blocked, and sales problems arise. Therefore, sales managers must learn to handle excess inventory cleverly and flexibly during season transitions. Besides sales personnel maintaining the right mindset and avoiding blind stock pushing, and distributors not overstocking to exploit policies, the following four methods can be used to handle excess inventory:

**Piggybacking Method**: This method is relatively simple: use the slow-moving excess product as a gift for another product, which could be a new product or a popular bestseller. By leveraging the launch of the new product or the influence of the bestseller, you can drive the quick turnover of the excess product.

For example, a liquor manufacturer's distributor in Guilin also represents the local popular brand Lijiang Beer. After the liquor peak season, the regional manager coordinated with the distributor to use the leftover liquor products as promotional gifts, letting the popular Lijiang Beer "carry" them. The promotion stipulated that for every 30 cases of a certain mid-range beer, a case of six-bottle liquor would be given, thereby clearing the excess liquor inventory.

Two points to note with the piggybacking method:
1. Don't force the "piggyback." When using excess products as promotional items, try to persuade downstream distributors to accept them. This requires sales personnel to use tactful language to avoid causing resentment.
2. Control the quantity of piggybacked products. Don't give too many excess products with each popular or new product to prevent "secondary inventory" in the downstream channel. Based on the actual sales capability of downstream distributors, provide a reasonable ratio, and avoid "hard pushing" that could lead to losses.

**Bundling Method**: This involves "bundling" the excess product with a popular product in the market, meaning that to buy the popular product, the distributor must also buy the excess product. This cleverly converts the excess inventory into cash.

For example, a liquor manufacturer's "classic" product is very popular in the market, even in the off-season. When a new gift-box product launched before the Spring Festival sold poorly, the manufacturer introduced a policy: to order the "classic" product, distributors had to take 10% of the gift-box product. Although this seemed like a "forced sale," because the classic product was so popular and profitable, many distributors eventually accepted the ratio, allowing the slow-moving inventory to circulate in the market and achieving the manufacturer's desired "inventory transfer": shifting the risk to distributors, forcing them to work hard to sell, and completing the "leap from commodity to money."

Unlike the piggybacking method, which treats excess products as non-moving promotional gifts, the bundling method sells the excess products, converting them into cash and eliminating the risk. Points to note:
1. The "accompanying" product must be a bestseller. If it's not popular or favored by downstream distributors, this method won't work. So having a suitable bestseller is a prerequisite.
2. The manufacturer must provide deep support to fully digest the excess inventory. After the inventory transfer, the products must ultimately be consumed. This requires the manufacturer's sales personnel to take responsibility, assist distributors in distributing to downstream channels, and ensure the products are accepted and consumed by customers.

**Reverse Price Increase Method**: This method requires some skill and courage. The key steps are: 1. Decisively raise the product price, with the increase based on the prices of leading competitors in the market. 2. Simultaneously increase promotional or discount efforts to make them attractive enough, so that the final price is lower than the original. 3. Sell the product in regions or channels where it hasn't been sold before, which is crucial for success.

For example, a beer distributor, to clear slow-moving inventory in circulation channels (like retail stores) during the off-season, raised the price from 24 yuan per case (with a bottom price of 21 yuan after promotions) to 36 yuan, then launched a "buy one get one free" promotion and aggressively distributed the product in large food stalls and B/C-class restaurants where it hadn't been sold before. Due to the seemingly huge promotion and effective publicity, thousands of cases were quickly cleared.

Points to note for the reverse price increase method:
1. The price-increased product must be sold in "unfamiliar" regions or channels not previously touched. If it's a "half-familiar" area, be cautious to avoid price "exposure" and product "discovery."
2. The promotional or discount effort must be large enough to attract downstream channels and customers, luring them in.
3. Sales personnel must be bold and confident, daring to "quote" the price, and through confident presentation, win over customers and eliminate their concerns.
4. Never let downstream customers know the product is excess inventory; otherwise, even with low prices and big promotions, they may refuse. Excess inventory often makes people wary.

**Alternative Channel Method**: When the above three methods fail, consider the "alternative channel" method. This involves using non-traditional sales approaches, such as group buying or special channels, to dispose of the inventory in one go.

Common methods include:
1. Group buying: Convert excess products into welfare items. China values human relations, and with the establishment of trade unions, welfare awareness is increasing. By developing enterprise and institutional clients, excess products can become welfare items, directly entering consumption channels—a convenient way to clear inventory.
2. Joint promotion: Partner with non-competing companies to use the excess products as their "promotional gifts," achieving the goal of clearing inventory under the principle of win-win.

For example, a Sichuan liquor manufacturer had excess iron-boxed liquor that was hard to sell through normal channels. They partnered with a Guangdong VCD manufacturer for mutual cooperation: the VCD manufacturer gave two boxes of liquor with each VCD sold, and the liquor manufacturer awarded VCDs as prizes to outstanding distributors and retailers. This cleverly resolved the excess inventory problem.

Two points to note for the alternative channel method:
1. When conducting group buying, consider China's national conditions. When contacting relevant unit leaders, be aware of industry "unspoken rules." Research the "key figures" (those in charge of procurement and financial decisions) and "cater to their preferences," using relationships, favors, gifts, or rebates to open doors.
2. In joint promotions, maintain dignity and don't devalue the product. Even as a promotional item, the product's value should not be diminished. Use promotional brochures or flyers to highlight the "promotional value" of the excess product, so it doesn't lose value.

Additionally, product exchange is an effective way to handle excess inventory. For example, excess products can be exchanged for advertising with media, or for other companies' products to be used as welfare items, or even to offset debts.

In conclusion, excess inventory is a difficult "knot" for companies. But "the one who tied the knot must untie it." Companies and sales personnel must not retreat or fear challenges. By actively brainstorming solutions, companies can free themselves from the troubles of excess inventory, reduce losses, and achieve a virtuous cycle in product sales.

Editor's PS: 1. Break down into smaller units and sell separately; 2. Bundle with bestsellers for promotions; 3. Use large secondary wholesalers or core terminals for one-time disposal; 4. Have relationship clients or group buyers digest; 5. Special treatment through special channels; 6. Mobilize employees to help; 7. Apply for special low-price disposal from the manufacturer.

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