One ad that keeps popping up on radio and tv is the
“We Are Overstocked Sale”
I have been in business many years and one the single most important factors in management is inventory. Stock costs money. Overstock is working capital tied up in storage. When most businesses are operating on limited budgets, inventory excess means someone is not getting paid or a bank note is needed to meet expenses. Either way, overstock is a drain on profit.
Inventory is probably the easiest part of business to control. It is a tangible ingredient. Not like the effects of economic downturn, or customer growth and loyalty which are intangibles, ingredients one has to work with and around. Or bank rates, which generally are out of business control, or repairs and maintenance which can bring sudden surprises. Employee relations are another of the intangibles, more than simple counting and ordering.
Yes, there is need for sales projections, but if you are on top of your game and watching the pulse of the industry you are in and look back on past performance, what inventory is required to cover sales should not be such a burden on the company budget.
My point is this; Why would I trust buying from a company which advertises their poor management? Especially when it is the same companies, most often furniture and appliances, telling the same “Overstocked” story over and over again. They are either extremely poorly managed or outright lying to customers and just using overstocked as a sale strategy. Either way, I don’t want to do business with them. They think people are stupid. The ads are directed at the gullible.
If poorly managed, then the services they offer will be poorly managed. If they are lying about being overstocked, then they most likely will lie about their product and service.