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How Inventory Liquidation Can Be Beneficial To Your Company.

By Jonathan Finn

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.

Due to the current state of our economy, it is not uncommon to hear about companies liquidating on the news. The form of liquidation that you’re now so-use to hearing about is called compulsory liquidation. Compulsory liquidation is the type of liquidation that companies dread. It is when a company is forced to liquidate by law. It is the last gasp of breathe for a company to minimize their debt, before shutting their doors. The other form of liquidation, voluntary liquidation, is often used quarterly (or more frequently) by nearly all Fortune 500 companies. Voluntary liquidation allows a company to convert stale inventory into cash usable for day-to-day transactions. Today we will discuss some key points on voluntary liquidation, and how they can benefit your business immediately.

Inventory management and control should be very important to all manufacturers, retailers, and distributors. Large inventories always look appealing to consumers, but truthfully a large inventory can be a huge burden on a business. Generally, the greater the size of the inventory, the greater the costs are to maintain that inventory. An enormous amount of businesses fail because they sit on too much inventory. A rule-of-thumb for a business is that they should spend less than 1/3rd (one-third) of their usable cash on their inventory. Regardless of strict inventory management, problem inventory is unavoidable. Sometimes inventory gets hidden, wrong purchases happen, and physical inventory counts are incorrect. Having a reputable liquidator on file is always smart for when these instances arise.

Here is how a reputable liquidator can help you:

1. Receive CASH For Your Obsolete and Excess Inventory

Businesses are often stuck with some sort of excess inventory: perhaps you ordered too much holiday decor, or your toothpaste cannot be displayed on shelves anymore because the expiration date is coming up in 6 months. Whatever the reason may be, you have inventory that is costing you more money than it is making you. Having a liquidation company is a necessity when these problems occur. A reputable liquidator acknowledges your problem inventory and specializes in turning these problems into immediate and usable cash.

2. Protect Your Brand

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. Controlling The Channels

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. IMMEDIATE CASH WITH NO TERMS

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.

SELLinventory.com has been an industry leader in liquidation for over 25 years. To get a FREE QUOTE or for more information click SELLinventory.com, and see how SELL inventory can help you.

Article kindly provided by UberArticles.com

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Article Citation
MLA Style Citation:
Finn, Jonathan "How Inventory Liquidation Can Be Beneficial To Your Company.." How Inventory Liquidation Can Be Beneficial To Your Company.. 21 Jun. 2010. uberarticles.com. 3 Aug 2014 <http://uberarticles.com/finance/bankruptcy/how-inventory-liquidation-can-be-beneficial-to-your-company/>.

APA Style Citation:
Finn, J (2010, June 21). How Inventory Liquidation Can Be Beneficial To Your Company.. Retrieved August 3, 2014, from http://uberarticles.com/finance/bankruptcy/how-inventory-liquidation-can-be-beneficial-to-your-company/

Chicago Style Citation:
Finn, Jonathan "How Inventory Liquidation Can Be Beneficial To Your Company." uberarticles.com. http://uberarticles.com/finance/bankruptcy/how-inventory-liquidation-can-be-beneficial-to-your-company/


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