Five Point Capital Scam and Overstock Avoidance Advice

A recent Five Point Capital scam and overstock avoidance article offered some valuable advice about what to do if you are ever caught with too much inventory as a small business owner. It may happen because you were duped into buying more than you needed, or you may have made an error based on assumptions from the pre-recession economy. Or maybe the market has simply changed and there is no longer as much demand for the products you are now holding. Purchasing excess inventory can be a pitfall for any small business, so there is no reason to feel foolish if it has happened to you. It only becomes a huge problem if you don’t learn from the mistake. Fortunately, there is plenty of good advice to help small business owners who are in this dilemma.

How Overstock Occurs
Excess inventory can be caused by scams in which the business owner is convinced they need more than they do. According to the experts at Five Point Capital, scam perpetrators are not the only ones at fault when small businesses end up with too much overstock. It can also be caused by sharp drops in sales, which may be the result of any number of things. While large businesses and corporations typically have systems in place to avoid overstock, smaller businesses can easily have this happen due to any number of human errors within the company. It is most likely to occur as a result of unsophisticated purchasing systems that base purchases on prior activity, which can be misleading, especially during a recession. It may be that too much inventory is better than too little; however, that doesn’t change the fact that overstock can also be a big problem.

Suggestions for Dealing with Overstock
There are many different ways to cope with the problem of excess inventory. Since inventory loses value the longer it sits on a business’ shelves, it’s best to deal with the problem quickly and efficiently, as soon as it arises. The team at Five Point Capital suggests the following solutions:
• Give it away as a tax-deductible donation (good PR!)
• Discount it for a quick sale (if you don’t plan on selling this product again)
• Offer it to an inventory liquidator for quick resale
• Repackage it and offer as a reward for buying other products
• Sell it online through a third-party website

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