In an increasingly volatile retail climate, strategic liquidation matters
The brick and mortar breakdown continues: last week we read about another teen-apparel company fighting for survival (joining a growing list of major chains struggling to stay afloat in today’s fickle retail environment). The clear culprit is the shift in consumer behavior from in-store to online and the inability of these once-popular stores to keep up with fast-moving fashion trends. With margins increasingly tight and fear of bankruptcy on the horizon, the ability to run leaner is crucial; this includes thinking about more efficient, strategic ways to shift and recoup value for excess inventory (which is a given when dealing with store closures and warehouse consolidation). Oftentimes marking the inventory for closeout or sending it to another store is out of the question due to time, budget and logistics constraints; instead, much of the merchandise will be marked for liquidation.
When it comes to excess merchandise challenges – due to store closures or high rates of excess inventory in general – it’s essential for retailers (struggling or not) to have a solid liquidation program in place to offset as much loss as possible. Traditional methods, including selling this inventory to a single liquidator for a rock-bottom price or negotiating offline with a handful of buyers, always leaves money on the table. Retailers need to stop approaching liquidation as an afterthought and start thinking about it as a strategic asset: every dollar increase in recovery value, or reduction in expense falls 100% to the bottom line. In the case of those retailers that are on the brink of bankruptcy, a liquidation program that recoups 30-80% more can mean the difference between survival and extinction.
The most effective liquidation programs come in the form of web-based solutions; this type of solution allows thousands of buyers to compete for the inventory, pushing prices up versus a handful of buyers negotiating them down. A customized, private business-to-business, online auction liquidation marketplace platform is one way to make this happen. This type of platform can be configured, integrated and scaled to meet your unique needs. Another option is to leverage an established multi-seller B2B liquidation marketplace; this type of solution connects your inventory to a broad base of buyers who are interested in merchandise across all categories and conditions.
These types of solutions will not only deliver the highest possible price in the market at the moment, but it will also automate the sale process, deliver a faster sales cycle and generate proprietary market intelligence in the form of real data on market prices.
In today’s fickle retail environment, it’s so important to establish programs that drive value from every area of the business; this includes liquidation. For more information on why liquidation is worth worrying about, please visit our News & Insights page. For more information on the clients we serve, please visit our Client Marketplaces. If you’re interested in learning more about how B-Stock can build an ongoing, customized and technology-based solution for your liquidation inventory, please contact us.