Liquidators or Wholesale Distributors of closeouts, overstock and customer returns are having problems to sustain growth. The retraction in the global economy is not the problem. The biggest challenge for the liquidator is acquiring sufficient sources of distressed inventories for their customers. I discussed this topic in my last article.

To start we need to look at the large Retailers and the Retail Supply Chain. The Retailer’s Salvage merchandise is provides the liquidation companies with the low priced bulk items that their customers demand ( “B” Channel or Off Price Retail Stores).The changing retail supply chain is making it necessary for the liquidator to change their business model. The trading in distressed  retail inventories is much different now than 10 years ago. It is very difficult for a Liquidation company to obtain exclusive  salvage contracts The liquidator needs to bring something else to the table. Retailers do not want to just dump their product for pennies on the wholesale dollar. They want to obtain more value from these surplus inventories.  

One way for a liquidator to start a transition to a value added processor of distressed inventories is have a monthly live auction. They can sell their stale merchandise in this sales format.  The auction once established can be a good way to get a pilot run from a Retailer. The liquidator can guarantee a minimum price to get started with The Retailer. This establishes the business relationship with the retailer. Making easier to obtain a contract for their regions returns from the Retailer. This is a good first step. The change from liquidator to third party service provider is a long process. Taking simple easy steps is well worth the effort. This is one little to no-cost approach to sustain growth and viability. Many other steps will be necessary.

This is an example of a dynamic business plan to meet needs of corporations. The understanding of benchmarking of business processes and best practices is key in staying ahead of the curve. The next article will talk about benchmarking and why to participate in these studies.

Read more about the changing liquidation industry at Liquidation Authority Site for buying and selling surplus and salvage merchandise.

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