Did you know H&M stored $4.3 billion worth of products in their warehouses in 2018 alone? And this well-known brand is not the only one. 90% of businesses worldwide sell physical products at a financial loss due to the problem of accumulating unsold products. Even big, prestigious, and high-quality brands. In Europe, for example, stocking textiles represent an additional cost of as much as 8% of the purchase price of the product. In 2018, this resulted in $210 billion estimated costs of unsold inventory. On a worldwide level, Australian Circular Textile Association is estimating that approximately 30% of clothing made worldwide is never sold.
How to successfully reduce product inventory is often a question that keeps many brand sales managers awake at night. They are mainly faced with the following three concerns:
- How can I upscale sales in certain countries or how can I test out new markets in order to meet annual sales targets?
- Where can I sell leftovers after the season is over and avoid them piling up in warehouses?
- How do I avoid continuously lowering product prices in brick & mortar and risking a loss of brand value?
Yet, these concerns should not be taken as problems, but rather as opportunities. Being aware of a fact that everybody moves online nowadays, where business can be more resistant in times of a crisis, as the coronavirus pandemic has been nicely showing us, even warehouse overstock can be solved by the use of modern technology.
It is true that competition can be fierce, but on the other hand, statistics are showing that eCommerce business will only grow in the coming years. The industry is already noting high sales revenues in Europe, namely in fashion (2019: 89.5 million euros), electronics (2019: 76.4 million euros), and home and garden (2019: 60.1 million euros) categories. Furthermore, e-commerce users are growing. According to the statistics in 2019, they amounted to 597.4 million people and will grow for 15 million each year, expecting to reach 662.3 million users by 2024.
Eastern & Southern European markets are particularly hot with increasing demand in double figures. If the growth rate of eCommerce revenue is stagnant in Western and Northern Europe, this is not the reality for the other parts of the continent. Markets of Southern and Eastern Europe are unsaturated and have a revenue growth rate of up to 10.4% (Italy), followed by Slovenia (8.4%), Hungary (7.6%), Croatia (7.3%) and Austria (7.2%). Given the fact that many famous worldwide brands are not yet present with physical stores there, eCommerce is a great way to test consumers’ affinity towards a new brand.
Nevertheless, not every eCommerce company is capable of solving the overstocking issue. To sell in traditional online stores, brand sales managers will have to offer products from new collections. Outlet discounters, on the other hand, will seek products from old stocks, and will not be bothered even if the variety (sizes, colors, etc.) of those products is usually limited and from the past, less desirable, season collections.
This is why e-platforms offering short flash sales with high discounts, are a better solution here. Selling through them will help reduce the brand’s warehouse stock and test the new markets at the same time. Consumers, on the other hand, will be happy to make deals on limited available choices, in order to receive better prices or higher discounts on products from their favorite brands that are not available in traditional stores. However, many of the existing flash sale providers, face some difficulties on their own. It is quite common that their product uploading solutions represent limits and that most of the time they’re doing it manually. This results in a slower and less efficient sales cycle. Besides that, some of them promote products that users do not need and thus do not address customers according to their style and personal preferences, resulting in selling less than they could. And the solution to problems offers Selonce!
Selonce – a new online solution for sales managers of top worldwide brands offering a better playground to test new markets and increase revenue by selling out overstocked warehouses
Selonce was founded first, to deliver high-quality brands at affordable prices in Southern and Eastern European markets, and secondly, to offer sales managers of top worldwide brands a better playground to test new markets and increase revenue by selling out overstocked warehouses.
We provide an advanced stock solution that allows you to sell unsold inventory from warehouses in just 10 days.
If you want to be a part of our story and solve your overstocking problem with a better eCommerce solution, get in touch HERE.
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