What should a business do if it has slow-moving or obsolete inventories?

Good Day!
Well, I am not and expert but I am developing a business about this problem.
I understand the business doesn´t want to reduce prices. It could affect its incomes, future sales and the customers or distributors relationship.
I think a good option would be the bartering system. With the barter you can exchange your slow-moving or obsolete inventories for products or services which you need and you are paying with money. The best is you can buy, paying with your own products (or services). Prices are same as cash market.
Best Regards,
Julio

Sell them to third world countries... the development in those countries are slower than in developed countries therefore your product might not be obsolete in their countries... if you cant wait to get rid of it, sell them as scrap value to recycling companies..

$1 is better than 100% loss...

Slow moving and obsolete are two different things. Slow moving means they are selling more slowly than your regular merchandise, but there is a market for the item. Obsolete means that in your product mix, this part or product is no longer used and may have no use at all.

For slow moving merchandise or parts, one strategy is just to wait it out until they are gone. Often for retail merchandise, running a sale can move a higer volume at a lower price. For slow moving parts, this does not work. But if the part was bought from a vendor and it is not custom to your product, you can see if the vendor will take it back with a restocking charge, which they may do if you also buy some new merchandise from the vendor that you actually need. You may also know other business customers of the vendor to whom the excess product could be offered. Occasionally the slow moving part can be substituted for another part with minor modifications or rework, which may be economical.

Obsolete merchandise is a more difficult problem. The part may be custom to your product and if it has been engineered out, there is no use for it. I advise never engineering out a part until an assessment has been made of the material that supported the prior version and as much as possbile of these parts used up. But many engineering organizations divorce their decisions from the manufacturing group and never take this step. If a part is custom and truly obsolete, there may be little alternative but to scrap or sell for whatever value there is in the materials. There may be some opportunity to keep an obsolete part for product service reasons and this should be assessed.

The traditional answer is to discount it, then discount it deeply, then finally to dump it either to another party to sell or as scrap. Depending upon the nature of the product you could also perhaps donate it it to charity. Also, there is the option of auctioning it off or selling it online. One clever client created a separate business entity that primarily exists to auction off slow inventory from the primary business but can do so without sullying the brand name of the primary business.

This is one area where the accounting can often lead the decision. Too often business leaders aren't aggressive enough in dumping or discounting dead stock because they understanding that doing so leads to a direct hit on the income statement. Maintaining the product on the shelves means they can keep it on the books at cost, even though it may be worthless. In fact, most accounting fraud comes from overstating inventory or overstating receivables. If you are an owner or a board member and your company has pay or bonuses linked to profitability then you will want to keep a close eye on those two areas.

Julio's idea of bartering sounds attractive, but the problem with that approach is you still have to price your product in a way that will attracts others to exchange their product. Furthermore, unless you are in the business of bartering and that you are very familiar with countertrade concept, it could be a logistics nightmare. Find a way to get rid of the inventory quickly at any cost including taking a loss (deep discount, donate etc.) and move on.

This is a very general question, but my response is:

L E A R N ! !

Understand why the products are moving more slowly than planned. Look at what happened that kept you from selling the product before it became obsolete. After you understand why it happened, change your processes so that it won't happen again, or, if it is unavoidable, then change the pricing so that this additional expense is borne elsewhere.

Move it FAST on eBay and/or Amazon.com. Take the dead stock and turn it into income using marketing platforms.