Net Trade purchases unwanted assets. We will pay the full asking price. Multiple purchase agreement methods including corporate trade and cash liquidation. Whether those assets are excess inventory, machinery, unused capacity or something bigger or smaller, our team of experts can help move those assets without upsetting current channels or partners.
Effective inventory management is the lifeblood of business Even the most meticulous planning may not prevent a surplus inventory challenge. When market dynamics shift, consumer sentiments take an unexpected turn or unforeseen events throw a curveball, excess inventory can creep into your operation.
Excess inventory exhausts precious resources. Warehouses fill with inventory, working capital dwindles and storage costs skyrocket. In this blog post, we’ll explore the pros and cons of different methods for liquidating surplus inventory and provide advice on how to do so effectively.
Pros and Cons of Different Liquidation Methods
Discounts and Promotions
One of the most common methods for dealing with surplus inventory is offering discounts. While this method can help you clear out excess inventory quickly, it also comes with some drawbacks:
Pros:
- Rapid reduction of surplus inventory
- Attracts price-sensitive customers
- Preserves cash flow
Cons:
- Reduced profit margins
- Risk of devaluing your brand
- May not work for high-value or niche products
Employ discounts to boost sales of slow-moving items or promote bundled deals that increase the sales of complementary products. Consider this method for items with shorter shelf life or that are sensitive to discounts.
Some companies sell excess to discount retailers who may not be regular customers. With the holiday season approaching, consumers are on the lookout for exceptional deals even earlier than in years past. Consider partnering with a discount retailer to alleviate your inventory challenges and create space for next season’s stock.
Resellers or Liquidators
Most clients need to use a wholesaler or liquidator. Selling your surplus inventory in bulk to wholesalers or liquidators can be an effective way to free up storage space and generate some revenue. Resellers and liquidators should be focused on selling to physical retail outlets. Research and establish relationships with reputable wholesalers or liquidators to ensure fair deals and maintain your brand’s integrity.
Pros:
- Wider reach and exposure
- No internet exposure speed
- Eliminate logistics and selling expenses
Cons:
- Less control over channels
- Price recovery will be low
Online Marketplaces
Online marketplaces can generate sales of slow-moving products. It is much more difficult to control the distribution or in some instances the pricing. Usually, these opportunities are not firm sales but rather consignment-type sales.
Pros:
- Wider reach and exposure
- Potential for higher unit sale recovery
Cons:
- Consignment sale
- Difficult to control distribution
Improve your online listings by crafting detailed product descriptions and incorporating high-quality images. To draw potential buyers, establish competitive starting prices. Explore alternative online marketplaces and platforms beyond Amazon to diversify your sales channels. This strategic expansion can widen your audience and decrease reliance on a single platform.
Corporate Trade
Corporate trade, also known as media barter, involves a company trading unwanted inventory in exchange for trade credits. The credits are applied as cash to reduce the overall cost of planned media campaign purchases through Net Trade. Corporate trade can generate immediate sales for up to the full value. Clients can extend their advertising budget, offering a more efficient and cost-effective solution. Corporate trade is a highly effective method for liquidating surplus inventory:
Pros:
- Immediately sell surplus inventory
- Receive full value for your surplus goods
- Eliminate all warehousing and selling expenses
Cons:
- Not all clients have expenses that match for trade
- May not work for all types of surplus inventory
Collaborate with a trusted corporate trade firm such as Net Trade to navigate trade deals and unlock the full potential of your surplus inventory. During economically challenging times, trade offers a swift and efficient way for companies to offload surplus assets while safeguarding their brand’s distribution and product alignment, all while preserving the inventory’s maximum value.
Integrating a media barter or trade strategy into your company’s broader media planning process empowers advertisers to pivot their attention, exploring fresh promotional avenues and expanding their advertising budgets.
Charitable Donations
Donating surplus inventory to charities or nonprofit organizations can be a rewarding way to clear excess stock while benefiting those in need.
Pros:
- Positive public relations
- Potential tax deductions
- Fulfilling corporate social responsibility
Cons:
- No direct financial return
- Limited control over the distribution process
- Tax regulations and documentation requirements
Select a charity or nonprofit organization that aligns with your company’s values and mission. Make sure to follow tax laws and keep a record of your donation for potential deductions. Instead of engaging in less ethical practices, think about contributing your surplus inventory. Numerous charities, both local and national, welcome a wide range of product donations, particularly clothing and apparel.
By donating, you not only make a positive impact on those in need but also contribute to combating the climate crisis by avoiding inventory disposal. Donations can also offer potential tax benefits, making it a practical choice for unused inventory. If your inventory isn’t suitable for donation, consider using it to reward loyal customers and clients through gifts and samples. This not only fosters and strengthens customer and client loyalty but also helps drive future sales.
Best Practices for Effective Surplus Inventory Management
To effectively manage surplus inventory, it is essential to follow best practices. This involves implementing a robust inventory management system to regularly review stock levels and identify surplus early on. Accurate demand forecasting helps minimize overstocking. Diversifying suppliers can mitigate supply disruptions while optimizing production schedules according to actual demand is crucial. When it comes to liquidating surplus inventory, selecting appropriate methods based on inventory nature is key. Lastly, tracking and measuring the success of liquidation efforts allows for ongoing refinement of strategies.
Surplus inventory can be a financial burden, but with the right approach, it can also present opportunities for cost recovery and improved inventory management. By considering the pros and cons of different liquidation methods and implementing best practices, your company can efficiently and strategically manage surplus inventory without negatively impacting your bottom line.
Remember that each situation is unique, so tailor your approach to fit the specific needs of your business. Effective surplus inventory management can ultimately help your company thrive in a competitive marketplace.