Throughout 2016 the value of unsold stock for small British manufacturers has grown to £4.94 billion, which now accounts for 16% of UK SME manufacturers’ total annual turnover. This is a huge amount that has built up as economic growth aims have not been met, causing greater financial problems for many companies. It is just one of the many problems that acre causing potentially fatal cash flow issues for SMEs based in many different sectors
The issue of having too much stock and being left with a lot of unsold products can occur relatively easily. All businesses intend to grow and in order to do this will need to increase their customer base, which relies on upping the number of products they are selling. To avoid running out and not being able to meet the increased demand, bulk buying or producing a lot more stock can lead to the opposite occurring. With a lot of unsold stock, this means that plenty of money will have been expended unnecessarily.