Feature, Operations, Sales & Marketing, V5I1

Aging Inventory

It’s going to happen. You can’t avoid it. 

One morning, you’ll pull up to your sales lot, look around at the sheds and other structures you have displayed, recently built and ready to sell. Then, you’ll notice a shed or two that look familiar.

Really familiar. Why? Because the buildings have been on your lot for a long time. What can a builder or dealer do to get that aging inventory off the lot—and try to avoid the issue in the future?

“The first thing that pops into my mind is a question,” says Derl Warren, a dealer representative for BLI Rentals. “Is the inventory building in question an actual inventory building, or is it a repo building/used building?”


When the structure is “actual inventory,” the shed has been built and placed on the sales lot, and … nothing. 

A significant amount of time has passed, other sheds and structures have been built and sold, and that shed is still sitting there with a “for sale” sign on it. 

If that’s the case, Warren would look at three things.

1. How many models of this style building did I sell over the last year? 

“If it was a popular style that sold with good margins, I would put a minimal discount on it as a simple sale and not advertise it as a ‘used’ or ‘aging’ building,” he says. 

Warren adds that the building will likely sell at near the original price. That’s assuming the structure in question is not more than a year old. 

What if it’s an unpopular style that didn’t sell well the previous year?

“I might deeply discount it with the intent of not even offering the same style in my catalog the following year,” shares Warren. 

2. How old is the building?

If the building is in its second year or more of display, Warren says he would deeply discount it and sell it. Again, he says if it’s an unpopular style, consider not offering that style the next year. 

3. How “customized” is the building?  

Every shed dealer knows that it is easier and more profitable to sell the simplest possible building at the highest price possible, according to Warren. 

“Adding too many options like extra windows, wild paint colors, offset or extra doors, etc. will decrease the number of potential buyers significantly,” he points out. 

He suggests that if the building is too customized, consider discounting it and putting up a more basic model on display the following year. 

Francesca Nicasio, a retail expert and content strategist for Vend writes in her article “Liquidating Surplus Inventory: 7 Smart Ways to Get Rid of Excess Stock” (February 14, 2017) that sometimes the sales problem stems from how merchandise is marketed or positioned. 

Positioning is the easiest change to make, moving buildings to different locations on the lot to offer potential buyers a “new” look at the structure.

Changing your marketing might require a little more cost and effort. For example, change up the sales signage on the shed or post new online photos or change up a print ad. Again, the idea is to offer potential buyers a “new” look at the structure, and possibly entice them with a discount.


Now, what if the structure in question that is still on your lot is used? By that, we mean a shed taken in on trade or a repossession from your RTO company? 

In this scenario, Warren has two questions, similar to those about “inventory” stock, to consider.

1. How long have you had the building?  

If the building is quite old, your RTO company will likely consider reasonable offers just to take it out of their inventory to free up money to buy more contracts, Warren shares. 

Another option used in the retail world, writes Nicasio, is to sell excess inventory online or through liquidators. While this method could also take time, you would at least have another avenue to sell used structures.

2. Again, how customized is the building?  

If the building is a repo and it was originally sold to a very specific customer with very specific needs, Warren says you could end up with a building that is only useful to a very small market—for example, a 14 by 40 garage with no garage door and no windows. 

“In this case, you are left with only the options of remodeling the building into something more widely marketable, which costs a lot of money and time. Or, deeply discounting the building,” he says. 


A way to help avoid the problem of aging inventory sitting on your lot is to take proactive steps to reduce inventory.

“End-of-year sales with significant reductions in price are good ways to increase cash flow for the winter and a lot of fun and income for your salespeople,” Warren says. “But, it is not a great way to increase your bottom line margins.” 

His suggestion? Consider trying a smaller discount, but giving away low-cost options, like a free ramp or shelving. Nicasio writes that this type of “bundling” of products is the second most popular pricing method for retailers across all sectors. 

Bottom line, your sheds and structures need to sell. Even buildings that stick around a while should be selling, in time.

“If your inventory is aging, try to figure out how many sales were generated simply by having that particular building on display,” suggests Warren. “Depending on who you ask, each inventory building should generate four to six sales in a year.” 

Are your aging buildings generating the sales they should?

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