Posts Tagged ‘wholesale’

Liquidation: The Burdens Of Excess Inventory

Saturday, July 17th, 2010

For many businesses, inventory is the single most expensive investment they hold. It has become more and more common that a business will tie half of [if not more] its total capital in to inventory. Unfortunately in today’s economy, carrying too much inventory has proven to be a burden for most companies. It needs to be understood, that inventory is directly correlated with cost and risk: the larger the inventory, the larger the cost and risk. Today, we will discuss how your goods turn in to excess inventory and how your excess inventory is costing you money every day.

Businesses are always surprised when they see that their beloved inventory isn’t moving as quickly as they had expected. It is only common sense that when the economy gets tight, consumer spending gets tight. When consumers are not spending as much money, you’re going to be stuck with slow moving inventory. What’s the difference between slow moving inventory, excess inventory, and overstock? Unfortunately, for your business there is no difference – all forms of said inventory are exhausting your company’s cash flow, rather than creating available cash for investing. In layman’s terms, slow moving inventory, excess inventory, and overstocks all cause a dent to your business’s bottom line.

So, what is your excess inventory costing you?

Interest

For most businesses, use-able cash comes from banks and lenders. This means that your inventory needs to sell in order to pay off the loans, but what if your inventory isn’t selling quickly? Unfortunately, using banks and lenders for capital results in accruing interest, and smaller profits. At what point do you cut your losses, and liquidate your slow moving inventory?

Storage

Depending on how much warehouse space your inventory uses and how long you have had it, your costs to store your inventory are much higher than you’d imagine. Add the actual used space and the maintenance for the inventory and you have a pretty hefty cost for your inventory that isn’t moving. Consider your limitations on space [due to your stagnant inventory] that should be used for new, faster moving inventory.

Depreciation

Depreciation should be the most obvious of your costs. Do you feel as if your goods that aren’t selling quickly, are worth the same as they were 6 months ago? For most products, they’re not. The longer your products sit, the more value they lose.

Time

If your inventory isn’t selling as planned, you’re most likely spending a lot of time stressing and grieving. Why beat a dead horse? Liquidate your excess inventory while it still has some value left.

Excess inventory is without a doubt a business killer. Inventory should follow a product life cycle that constantly moves. The less movement in your inventory, the more risks your business faces. Overall it stifles a business’s productivity from top to bottom.

Interested in liquidating your excess inventory? For a FREE liquidation quote, contact SELLinventory.com: Buyers of Excess Inventory.

categories: inventory liquidation,liquidate excess inventory,sell inventory,sell excess inventory,bankruptcy liquidation,problem inventory,liquidation,excess inventory,overstock,closeouts,bankruptcy,retail,wholesale

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Convert Excess Inventory In To Cash Through Proper Liquidation

Saturday, June 19th, 2010

For most small business owners, the thought of liquidation is appalling and grotesque. The media depicts their general ideas associated with liquidating into your brain: Front pages of newspapers read bankruptcy, tickers scroll the bottom of your televisions with exponentially increasing debt figures, and small businesses stick up gaudy neon-colored ‘STORE CLOSING SALE’ signs that scream urgency. With the economy in its current state, it’s not difficult to fall victim of all the hype [and scare]. Yet, the media fails to acknowledge the rest of the liquidation business; the beneficial business strategy of liquidation: converting your obsolete, overstock, salvage, returns, and excess inventory into immediate, upfront, and usable cash.

There are two major forms of liquidation: compulsory and voluntary. When you hear of liquidation in the media, it is compulsory liquidation, which is when you are forced to liquidate by law. Compulsory liquidation is the last resort for a business. It involves selling off every aspect of the business, from their inventory all the way up to their debts. When a company is compulsory liquidating, they are closing their doors for good. The latter form, voluntary liquidation, is the unspoken strategy that is used frequently within all Fortune 500 businesses. The top businesses in the current economy are ones that are liquidating inventory everyday. Today we will discuss some of the benefits of voluntary liquidation, and how applying this strategy to your business model will benefit you both immediately and in the long-run.

Whether you’re manufacturing goods, retailing them, or you’re a distributor, inventory management and control is key to running a profitable business. Your average consumer looks at a retail operation and is impressed by a large and vast inventory of merchandise. The truth is, these businesses with large inventories are the ones that face the greatest risk. A huge inventory also carries the burden of huge maintenance costs. Inventory should NOT be a business’s greatest capital possession. An efficient business that turns their inventory properly should be using no more than 1/3rd (one-third) of its usable cash to purchase merchandise. Even with proper inventory management, problem inventory is inevitable: management system errors happen, physical inventory is not performed regularly, and purchasing errors are made – to name a few. That being said, when these inventory issues arise, a reputable liquidator could provide valuable assistance when it comes time to resolve these inventory issues.

Here is how a reputable liquidator can help you:

1. Receive CASH For Your Obsolete and Excess Inventory

Every business comes to a point where it has some sort of excess inventory: seasonal items such as holiday decor or even clothing only sell during specific time periods, food and consumer goods become short-dated or expired, technology and fashions change so your inventory of corded telephones. Sometimes consumer spending drops and you’re left with merchandise that just will not sell. Regardless of the merchandise, it is costing you storage and maintenance fees, rather than earning you profit. A reputable liquidation company specializes in turning these excess and obsolete inventories in to immediate and usable capital.

2. Complete Brand Protection

Many people insist on destroying their branded merchandise (which costs a pretty penny), rather than let it make its way to the secondary market. A professional and established liquidator will know how to properly control the sales of your brand without damaging its image or name.

3. Complete Channel Control

The last thing your business wants to hear is that their product was put into the wrong hands. You do not want to find your merchandise in your own marketplace. Using a reputable liquidator can prevent your product from re-entering your market.

4. NO TERMS – IMMEDIATE CASH

A wise man once said, “A dollar today is worth more than a dollar tomorrow”, and the same thing goes for the liquidation business. While a big retail chain is willing to pay you $5 dollars for your book in 90 days, a liquidation company is willing to pay you for it RIGHT NOW. Though you are taking a loss liquidating, it typically ends up being less costly than the growing maintenance fee’s that you’d acquire while waiting to find the ‘right buyer’.

As you can see, liquidation is not quite as bad as the media makes it. Just because you are liquidating or interesting in the strategy of liquidation, does not mean that your business is to be associated with trouble. The secret behind the strategy of liquidation is to understand exactly what it is and how utilizing it properly and in a timely fashion will save you money and frustration in the long run.

Have inventory that you need to liquidate? Stop by SELLinventory.com, an industry leader in liquidation for over 25 years, where they pay IMMEDIATE CASH, for your obsolete and excess inventory.

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