Q. I need to clear excess inventory to make room for new orders. How can I unload it?
A. It’s wise to clear out slow-moving inventory, not only to make room for new merchandise but also to keep your store looking fresh and exciting and to offer loyal customers something new.
One possibility: donate excess inventory now and get a tax deduction this time next year.
The National Association for the Exchange of Industrial Resources (NAEIR), a non-profit organization based in Galesburg, Illinois, exists to make the process easy by connecting businesses that have excess inventory with those in need.
Tax law governing business donations is better than you may realize. According to NAEIR, by donating new product overstocks and returns, regular (C) corporations may deduct the cost of the goods plus half the difference between cost and fair market value; your deduction could be up to twice cost. S corporations, partnerships and sole proprietorships earn a straight cost deduction.
NAEIR has streamlined the process for donating businesses, sending the donor shipping labels and tax documentation. Although the donor company is responsible for the shipping cost, that is also a tax-deductible expenses.
“Donating is clearly better than throwing product away and taking a loss, and it can even be preferable to liquidating,” said Emily Collins of NAEIR. “You also get the benefit of knowing that your donation is helping the needy.”
Over 7,000 companies have donated $2 billion in inventory to NAEIR
since its founding in 1977.
For a free donor information kit, contact NAEIR’s Corporate Relations
Department at 800.562.0955 or email donor@naeir.org.
Do you have a retailing question? Ask the Michigan Retailers Association
by:
mail: 603 South Washington Avenue, Lansing, MI 48933
by fax: 517.372.1303
by e-mail: mra@retailers.com.
