Ways to Protect your Product Branding and Company Image

Most companies compile excess inventory in a variety of ways, whether it be: last year’s model, cancelled orders, returns, overruns, etc…

When working with brand name manufacturers, the first and most important thing that we take into consideration is brand protection. Some companies want to move their inventory out of the country, others want to avoid specific retailers, but the main theme is to do anything necessary to protect that brand and their regular customer base.

As a manufacturer or distributor, you need to take certain steps or put certain measures in place in order to protect your current client base and distribution channels.

If you were to consider an 80/20 rule- you wouldn’t want to disrupt 80% of your current sales, clientele or distribution channels in an attempt to clear the last 20% of your inventory.

Here are a few ways of protecting your product branding and/or company image:

There are a number of options to choose or actions to take in order to protect your product branding and/or company image

Channel Restrictions

The number one priority is to move your excess inventory in a manner that does not interfere with your current sales and distribution channels. Example: Dyson sells their products through their own website and larger retailers (Bestbuy, Walmart, Canadian Tire, The Bay). If they have excess inventory available, it’s crucial this does not end up at another retailer (not a regular customer), selling at a discounted price. This will not only affect your larger retailer’s sales, but could also affect your product value in the market and your control of where your products are now sold.

Pricing Restrictions

Pricing is often associated with ‘value’. Ever wonder why certain brands never go on sale? Companies will often implement ‘safeguards’ to assure their brands maintain a certain level of value in the marketplace. Example: A high-end denim company may require all their distributors or retailers to sell at a specific price point as to not undercut each other to maintain consistency within the brand.  Especially if this is the most current or “latest & greatest” model. Sometimes for olders models, brands will be okay with their distributors or retailers selling at a discount price.

Advertising Restrictions

‘open box’ vs. ‘brand new’ – Sometimes all you need to do is advertise the product as something other than brand new. Example: if the product is sold as “Open Box” at a larger discount, this might not affect your regular customer base. This could also depend on how much quantity you have available for the secondary market. (Can we say this? That we would suggest selling a brand new product as an open box?)

Destruction

Not necessarily the most cost effective or environmentally friendly option- but in some cases you may have no other choice!  For example, when products have an expiry date (food, vitamins, beverages, hand sanitizer, skincare, etc…) It’s crucial these products are sold with a long enough expiry for the end customer to use them.  If products go past dating, not only do you lose the whole value of the actual product, but you also have to pay the cost to dispose of this.  Depending on what you’re disposing of (liquids, chemicals, etc..) this can be a very costly process. When operating a brand, arguably the most important factor for long term success is Brand Protection.  From relationships with your largest customers (distributors/retailers) to price value in the marketplace, it’s important to keep this in mind when selling any excess or obsolete/discontinued inventory.