What are the best practices for pricing products that are nearing expiration?

You can lower the price of your products to survive in the competitive market and sell products nearing the expiration date. Product life cycle means the period of time when a product is offered to customers, enters the market, and goes out of use. To survive in the competitive market and sell products nearing the expiration date, you can raise or lower the price of your products so that you can sell all the goods.

It’s crucial to run a costing exercise before launching any product to assure achieving a healthy bottom line and optimize the business profitability. The most effective way to achieve is by investing in inventory management software, where you can run the sales engineering report and identify your stars, dogs, cows, plow horses. Then apply 80/20 rule by focusing on 20% of the products that drives 80% of the revenues. This helps in reducing the carrying cost, leverage the economy of scale and maximizing profitability.

While understanding your costs and margins, discount product placement is important to selling reduced items. There are benefits and detriments to placing discounted items in an easily accessible area; benefits more customer attention and probable sales, reduced write-offs, higher repeat traffic, and shrinkage. However, competitive product sales will suffer which may negate the higher profit that would have been if the competing product were sold.

Maximize sales for expiring products: Use dynamic discounts. Offer bundled deals. Clearly communicate expiration dates. Targeted marketing for urgency. Collaborate with retailers for visibility. Smart pricing boosts sales and reduces waste.

When purchasing articles , be sure to check prior inventory purchases & sales. Check the data for how long prior order was shelved & how many sold daily. Check any past or future patterns, trends that could vary new sales patterns. Start marking down merch by 25% for two days, if slow sales reduce merch daily an additional 25%. If still not sold , discount to 90% and consider replacing inventory item with different product.

An example of a successful demand planning strategy. Is to use both qualitative and quantitative analysis methods. Then set the PAR levels accordingly, factoring tight inventory control processes to assure using the correct depletion and storage methods such as FIFO, then track the inventories movements and minimize the slow moving items at the time of re-order.

Production and sales planning according sales histories and customers behavior, production and logistics capacity can reduce products with nearing expiration and balance between production and sales.

Cheap pricing will attract more audience than free products. And these should be communicated to the customers via loyalty programmes such as coupons, points etc..

One thing I have found helpful is that different products have varying demand across various markets and demographics. Key points to pricing a product close expiry are ; A. Location: a particular product can be slow moving in one region and be going off shelf in another, so you can basically transload to get value. B. Cost price : When determining the price of CTE products, the pricing can be done to mitigate the loss by placing it close to landing price in order to recoup the cost of purchase C. Promo and Bonanza: You can use promo coupons and bonanzas to control prices of CTE ( close to expiry) products to push it out with speed and still earn fair profits on such goods.

In my experience , you can practice a free gift after a purchase at a good price , which means either too high either too low. For example buy 1 + 1 free or buy 2 for 1 price.

Inventory should be checked on a rotation. Montly all consumables should be pulled once they are 90 days of expiration (pharmaceutical) This practice , I have found, to be the best way to make sure it is no longer out for purchase. Each company has it own guidelines and practices. I have found that most do agree , and allowed, for this practice. The problem is this, you should not ever have merchandise that gets this close to expiration. When your shipments arrive, you should be putting these medications behind those that are already stocked, even those in a cooler. From your shipment pull what you ordered for patients and do the other when staff and time are available, but that day. Always put up same day.

Most companies already have this set up and generated into the system. Markdowns should always be done per compliance. If any packaging is open, mark it out of stock immediately, do not mark for a discount. If you need to get it moved quickly, move to the highest traffic area. Putting it with regular markdowns will most likely not get it sold. Best practices I have used when moving items quickly is the higher traffic areas.

Most companies already have this set up and generated into the system. Markdowns should always be done per compliance. If any packaging is open, mark it out of stock immediately, do not mark for a discount. If you need to get it moved quickly, move to the highest traffic area. Putting it with regular markdowns will most likely not get it sold. Best practices I have used when moving items quickly is the higher traffic areas.

Most companies already have this set up and generated into the system. Markdowns should always be done per compliance. If any packaging is open, mark it out of stock immediately, do not mark for a discount. If you need to get it moved quickly, move to the highest traffic area. Putting it with regular markdowns will most likely not get it sold. Best practices I have used when moving items quickly is the higher traffic areas.

There is always the PR factor that can be gained by donating items near expiration. Many Panera Bread donates the bread they didn't sell that day to a local homeless shelter or food pantry. Add in a word of mouth campaign and your company will benefit with an increasing public opinion. I'd avoid an advertisement ploy, this will create a 'they're only doing it for the likes.' underswell that could counter the goodwill gained.

Sample them - obviously prior to them being a second best option - you will sell considerably more when people know and understand exactly what they are purchasing. You will build trust, and gain kudos and repeat customers for your generosity.