Making lucrative connections for your excess inventory is easier than you might think during the current component shortages.
Have you found yourself with excess electronic component inventory that’s taking up valuable shelf space? Are you also stressing over finding the components for your next project — all amid global electronic component shortages? Now is the moment to shift your mindset around your excess electronic component inventory. Components crowding your valuable storage space could be someone else’s gold mine.
While it seems counterintuitive to consider letting go of inventory in times of shortage, these conditions create the perfect opportunity to generate revenue through excess components. But don’t let the pressure to generate revenue force you to succumb to a piecemeal approach or settle for a standard off-the-shelf package. Here are the four best ways to leverage your excess inventory during the global component shortage.
4 Ways to Monetize Excess Inventory During a Component Shortage
1. Prioritize your unique needs.
When assessing a supply chain partner’s offerings for excess inventory solutions, avoid packages. Instead, stay focused on your specific needs. What is it that you are trying to accomplish with your excess inventory? Your needs should drive planning.
You might want to clear items out of the warehouse so that the work is done and storage space is freed up. Or, you may have more inventory than you need at the moment, but you’re unsure about your future needs. Consignment could provide the best inventory balancing option in this situation. We see excellent revenue returns through consignment programs, particularly for OEMs or CMs with excess inventory or a canceled build.
While the specifics of your excess inventory needs are unique, we’d always recommend working towards a long-term balancing of inventory. Even if you come in with an immediate need for space, it’s worth thinking through the bigger picture regarding excess inventory.
2. Investigate the possibilities for your inventory.
When financial pressure is mounting due to not having the parts you need to keep lines up and generate revenue, it’s time to get creative. You have inventory, but you’re concerned that it might not have the value it did a year ago; hence you’re sitting on it, waiting for things to turn around.
We are seeing prices for components purchased a year and a half ago making a significant value jump – when you find the right buyer. Even for minor parts, if you connect with someone in need with a line-down situation, you’ll have an eager buyer.
To do this, you’ll need to sort through obsolete, excess, or overstock inventory, including inventory with older date codes. Due to the shortages, a surprising number of valuable components in your inventory might be hiding in plain sight.
3. Bring the whole team on board to solve component shortages.
To get the most value out of working with a supply chain partner on an excess inventory situation, you want sales, excess, and all other teams involved with access to the global network all on your side.
In today’s shortage market, we are seeing companies with serious needs searching globally for products. Tapping into this requires a global team working together to help everyone in a beneficial exchange of inventory. Generating partnerships between customers and vendors solve shortages today – and potentially for years to come.
Purchasers on both sides need to come together in times of need to alleviate the serious struggles of safe, reliable sourcing of components. We recently saw a team in the Americas match up excess inventory with a need flagged by a rep in the EMEA. Everyone benefitted from that connection, and those kinds of global partnerships can generate revenue and keep lines running in a shortage market.
4. Put data to work for you.
Analyzing current market information is critical. Doing so will allow you to keep track of the market demand for your excess components while also gaining access to information about the parts you’re seeking that are in shortage conditions.
Supply chain partners have vast amounts of data that can help support you to move your excess inventory. Especially at times of shortage, getting access to a breadth of information is critical.
Keeping today’s component shortages in perspective
We can speak with over four decades of experience to say this is an unprecedented time in the market, and we don’t see it changing anytime soon. This time presents an excellent chance to frame a unique solution to keep your organization healthy for the long term.
With demand skyrocketing across the board for all types of components, shortages present the perfect opportunity to move excess inventory and make room for your next project’s top-priority components. Older components taking up valuable space in your warehouse might meet someone else’s desperate need. Until you access a global network, you won’t know the value of what inventory you’re sitting on.