When some people think of the word, “liquidation” they think of a prolonged and arduous process with large amounts of bureaucratic red tape to bypass. However, many businesses can actually benefit from proper electronic liquidation, and liquidation does not necessarily mean that a company has gone bankrupt and needs to sell off its assets in order to pay back its creditors.
For instance, electronic liquidation can allow a company to get rid of its electronic goods so that it can make room for the latest appliances and gadgets on the market. Or, the company may simply opt to get rid of the electronic merchandise that it no longer needs or wants. Here, we discuss some of the benefits of electronic liquidation.
While liquidations can and do take place in the physical realm many companies turn to online liquidators to get rid of their excess inventory. For instance, many people turn to online auction sites such as eBay to obtain items because the process is much faster. That is, online auctions usually end within a few days, and people like the convenience of not having to leave their homes to make purchases.
They also don’t need to deal with the hustle and bustle of rowdy crowds, nor do they have to worry about wasting time and money driving to a retail outlet only to discover, much to their chagrin, that the item they wanted is no longer in stock. Consumers also have the option to buy a lot of goods immediately at a predetermined price, bypassing the auctioneering process altogether.
Source Otherwise Unavailable Inventory
Liquidation sales can also benefit an enterprise by allowing them to source inventory that would otherwise be unavailable to them. Examples may include name brand electronics, sporting goods, fashion, as well as beauty and health items. Evidently, if you want to liquidate your own merchandise you can do so in order to eliminate your unwanted electronic goods.
However, you can also take advantage of the liquidation process by not only selling off your own merchandise but also purchasing merchandise from other wholesalers or retailers. For instance, you can purchase popular or trending products for your own business, at a heavily discounted price, and then sell them to your own customers at a discount.
Or, you can sell them at their regular price and maximize your profit margins as well. You can even use some of the money that you made liquidating your electronic goods in order to purchase the excess or unwanted inventory of other companies in order to replenish your own depleted stock.
Write Off Outstanding Debts
If your company needs to liquidate its electronics because it needs to pay off its debts then electronic liquidation may be the best solution for you. Given the fact that you will be unable to continue to trade if you are insolvent, liquidating your inventory may allow you to get out of debt so that you can get a fresh start with a new business venture and not have to deal with the stress of having financial obligations to fulfill.
Any Legal Actions Will Cease
If you are being harassed by collection agencies or other third parties then liquidating will ensure that any legal actions against you and your company will stop. As such, you will be given the opportunity to delve into other corporate ventures without having to worry about being harassed by creditors.
Employees Can Claim Redundancy Pay
While employees will be rendered redundant by the liquidator in question, they may be able to take advantage of any redundancy pay when the company’s assets are sold. However, if the money generated from the asset sales is not sufficient to fully compensate them for their labour then they may be able to take alternative routes in order to obtain the back pay that is owed to them. For instance, certain insurance companies may be able to provide them with uncollected wages, holiday pay, and redundancy pay that is owed to them and other staff members.
Cancel Any Leases
Any terms pertaining to hire purchase and lease agreements will usually cease at the date of the liquidation. In other words, the company will no longer be obligated to make any subsequent payments after the liquidation date. In some cases, arrears may be owed, and such issues can be resolved by having the enterprise that is leasing the goods claim them from the insolvency practitioners.
Costs are Low
While a company director will likely be required to fund the holding of a creditors meeting, as well as the expenses incurred in arranging a Statement of Affairs, there is very little else that they need to be concerned about, in terms of fees. That is, any professional fees will be taken care of when the company sells off its assets, so other than the initial upfront costs there is virtually nothing else that needs to be funded.
Most companies will prefer to avoid a drawn-out and contentious court battle with their creditors, so choosing the liquidation route can allow a company to bypass the court system. To do so, the company will need to convince the public that its decision to liquidate was voluntary and was not the result of hostile actions by their creditors.
To learn more about the advantages of proper liquidation, call Michael’s Global Trading at 888-471-5066 or contact us here.