Q: I have a lot of money wrapped up in inventory. How can I free it up?
A: You can free up a lot of money by reducing your inventory, but you don’t want to run out of essential items. You need to systematically classify every item you have in stock. Divide them into three categories:
A = Items that turn frequently (e.g., every week or month)
B = Items that you occasionally use
C = Items that are old, slow-moving, or obsolete
You need to keep a healthy stock of all your A-list products. For items on list B, investigate potential alternatives. If you can find a supplier who will let you buy these products on demand, you can eliminate them from your inventory. The items on list C you should flush from your facility entirely. Sell them for any price you can get.
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