Excess Inventory is Hurting Apparel Brands

Over the past several months, we’ve covered the state of excess inventory in apparel retail through the pandemic, and it’s looked bleak. As apparel retailers emerge from a pandemic slumber, they’re facing a harsh reality: Their investments of hundreds of millions of dollars in inventory spanning from jeans to handbags is now sunken in a pit of despair—or a massive pile of excess inventory.

All this comes as some of the biggest names in retail grapple with bankruptcy proceedings in federal court as a means to protect themselves from creditors. Some of these include Sears, JCPenney, Neiman Marcus and Pier 1. However, can the consumer rebound that occurred in may bring the promise of hope? It’s too soon to tell, as a new wave of coronavirus has re-emerged in a number of states and others have even reversed their decisions to reopen. So, in the meantime, how can apparel brands and retailers tackle their excess inventory?

Excess inventory options… What are they?

Liquidation Firms

As retailers look into options for offloading their excess inventory, it’s not looking too good. While professional liquidation firms specialize in helping stores by buying their surplus, their offers are less than generous. On top of already losing key fashion seasons and trying to gear up for Fall, most brands can expect to make only 10 cents on the dollar for their surplus—which is leading them back to the drawing board of solutions.

Online Auction Marketplaces

As the old adage goes, beggars can’t be choosers. But can’t they? In today’s market, retailers and brands have to make business sound decisions when it comes to their excess inventory. Between managing bankruptcy, being sound in a pandemic era, and figuring out how to recover the most they can, liquidation companies aren’t the only option. There are also options such as B-Stock.

B-Stock helps nine of the top 10 U.S. retailers use private, online auction B2B marketplaces to sell their returned and excess inventory. These marketplaces are customized, integrated, and scaled based on the retailer’s unique needs—think of it like your own storefront to sell returned, excess, or other b-stock inventory. They also allow total control over who is buying the inventory and how it enters the secondary market.

How online auction marketplaces solve for overstock:

Higher Pricing

When done right, a B2B marketplace offsets substantial loss for returned or excess inventory, even comparable to reprocessing back on shelf or returning to the vendor. Setting up an online auction dynamic where specifically targeted buyers compete to buy your merchandise allows pricing to go up.

Channel Control

Control who sees and buys your excess inventory by marketing to a database of targeted, vetted secondary market buyers. Exposure to the right buyers ensures there is no confusion between primary (a-stock) or secondary (b-stock) channels and protects your brand.

Velocity

Move excess inventory as needed—regardless of volume, time of year, or product category—with a larger buyer base made up of the right buyers.

Automation/Efficiency

Improve the operational efficiency of your liquidation program by automating your liquidation process. No more spreadsheets. No more faxing. No more negotiating over the phone.

Online Auction Dynamic

Extract buyers’ highest willingness to pay and have real data on secondary market prices. Increased competition through auctions means higher pricing; it also drives velocity and creates a sense of urgency and excitement.

Learn how you can choose a different level of recovery for your excess inventory by requesting a demo.