7 Reasons Why Business Liquidation Auctions Make Sense

(Attention: reclamation centers, importers, wholesalers, distributors, and retailers)
It is hard to rationalize why a business would want to liquidate assets, but here are several very good reasons.
Space:Approximately 7.5% of most warehouses or stockrooms' inventory never or rarely sales. The cost of warehousing that percentage of dead merchandise ends up being what? Although, warehouse/stockroom cost is rarely taken into cost and should be. As an example 25,000 widgets landed at .02 per pc. They are using 2 square feet with a cost of $18.00 per square foot per month. After a year how much did the widgets really cost? $0.03728. The cost of warehousing dead inventory ends up costing a small fortune, over time for most businesses. Why tie up warehouse space when you can free up the space and the space could be used for faster turning merchandise that generates positive flowing profits?
Inventory: How long is an item in your line before your sales team stops showing the product? What % of the goods sold? Now you have to close them out. Your sales team is already tired of showing the goods and has shown them to all of their accounts. Fine you are waiting for the reorders to come in only to find out that they are not! Not that I should say this but 9 times out of 10 it is not the goods it is who has shown them and who has seen them. The lack of a fuller audience is a problem and always will be can your company see everyone? No not really. I have been there I know. Here you are sitting with goods and not turning your investment. This is just one of the reasons why liquidation can be a helpful hand. There are a lot of ways of looking at a liquidator in part they can be your answer as another selling arm of your business helping you market your unwanted inventory to markets that want them.
Out of Date inventory:With all the new laws taking effect in all countries the longer you sit on a product today the more lightly you will end up throwing the inventory, your investment, into the trash! This was before I started Nickysb2b.com but, I have one friend, an owner of a good size company that was held onto dead merchandise until finally he ended up throwing away over 10 containers of merchandise. The damage ended up being well over $250,000.00. What could he have done with that or even half of that? For this reason alone it is better to have lost a little then to loss it all!
Returns:Store returns are a killer in any warehouse. The freight in, the labor receiving and counting every last piece only to find out that the retailer, who you can not offend, short changed the count or sent you someone else’s merchandise. Would it not save time (money) to put them on a pallet and liquidate the mixed lot? Is the money better spent on positive flows inventory?
Fixtures, Displays, Office Equipment:It is more often then not a warehouse or retailer will throw out fixtures. I have always tried to make sense of it, but was never able to. You are throwing out money! Why not liquidate the fixtures and turn them into reinvestment dollars? As a retailer you know all displays cost money whether they are from a straight purchase of came "free" with their cost added into the price of the goods. How many displays are thrown out each year? The answer is most if not all at the end of the day. Would it not be better to turn them into cash? Again this is just another way of increasing overall profit margins if your a retailer and I know you need the money. How many computers, printers, and accessories are setting around in a storage room? I have to ask: are they resting? Just joking but...I know a lot of offices have them setting there. Here is another group of assets, "your investment dollars", just collecting dust. Liquidate them and use the money where you need it.
Cash Flow:By liquidating dead merchandise, even though, it maybe at a loss, a business is freeing up its investment dollars. Those dollars could be reinvested effectively in more and profitable areas, such as, investing in new products or new technologies that ultimately generate better cash flows, better for the overall bottom line.
Banking:Most businesses today borrow funds if you are one of them you know the bank is looking very closely over your shoulder. Is better showing the bank how many investment dollars you have tied up in stock or showing the bank a faster cash flow and stunning bottom line? I think you know the answer, but if not ask your banker they will be happy to tell you.
Closing statements:Liquidators free up warehouse or stockroom space.Liquidators are your additional selling arm of your company.Liquidators help remove your out of date inventories.Liquidators help lower the cost of handling.Liquidators can help show you the money.Liquidators can help with cash flows free up, investment dollars, and even your banker will be happy! After all "liquidators" keep you "liquid".
In today’s economy can you afford not to turn your unwanted assets into cash?
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