08 Apr

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Advantages of Retail Liquidation

Advantages of Retail Liquidation

Many retailers are not aware of the myriad of benefits that retail liquidation can yield. They are often ignorant about what the liquidation process consists of and how they can benefit from retail liquidation. For instance, many retailers mistakenly believe that liquidation companies only sell refurbished merchandise. As such, they choose to ignore liquidation companies and look to manufacturers, local suppliers, and wholesale suppliers instead.

While it is true that manufacturers tend to have the best prices on the market, they also tend to have elevated minimum purchase requirements that may be next to impossible for smaller retailers to fulfill. Here, we will discuss some of the biggest advantages of going to the retail liquidation route if you own a retail outlet.

Enjoy Well Below Wholesale Pricing

The biggest advantage of retail liquidation is the price. For instance, wholesale pallets can be purchased for well below wholesale if you buy from a liquidation enterprise. Moreover, while most liquidation companies do primarily sell bankruptcy stock, surplus inventory, and refurbished merchandise, the demand for wholesale pallets has increased substantially over the last few years.

Obtain Access to High-Quality Products

While many of the products that are available are surplus inventory, bankruptcy stock, and refurbished items, you will still be provided with access to very high-quality products. This is because the reputation of the top liquidators in the market is of the utmost importance in order for them to stay at the top of the liquidation hierarchy. As such, they will have very strict quality control guidelines to ensure that only top quality products are available for sale.

In fact, one of the ways in which the top liquidators on the market guarantee high quality is by signing exclusive contracts with manufacturers and retailers that liquidate their products directly via their websites. By doing so, they are able to avoid wholesale suppliers, which allows them to lower their prices. Moreover, even in the event that their merchandise is returned by consumers, which happens in roughly 30% of cases, the products tend to be returned in excellent shape, and are sometimes even returned unopened.

In the end, the liquidation industry is highly competitive, and liquidation companies need to maintain a stalwart reputation to remain competitive. Therefore, products will often undergo rigorous testing to ensure that they work as well as brand new merchandise, which will not only help boost a manufacturer’s reputation, but also reduce the number of annual returns.

In fact, some liquidators, who conduct the refurbishing of their merchandise in house, will offer an ironclad, 90-day, no questions asked money back guarantee in order to ensure that buyers can buy in confidence.

An Efficient Way to Move Inventory

Both big and small businesses will occasionally have trouble moving products via conventional e-commerce websites or through retail stores. Markets can also be highly competitive, regardless of the industry or product, and certain brands may opt to replenish via the liquidation of their present inventory levels. Indeed, many marketers and manufacturers choose liquidation as their first choice when they determine that their inventory must move as soon as possible.

Companies that liquidate their current inventory levels can reap many benefits, including being able to reinvest, obtaining new inventory, and recovering and/or harnessing more cash. In other words, most companies will have many options at their disposal when it comes time to liquidate its inventory.

For instance, a company may decide that one way to liquidate its existing inventory is to lower its prices drastically with its current distribution channels in order to promote the sales, which will in turn incentive consumers to buy. However, the aforementioned approach can take some time, so it may not be the ideal strategy for some companies.

Instead, brands can garner more momentum, and receive payments quicker, by working with a liquidation company. While a liquidator will pay less in order to obtain the company’s products at a discount, they will pay the company immediately and will usually take most, if not all, of their inventory off their hands. A company also does not have to work exclusively with a single liquidator, meaning they can obtain optimal results by splitting their inventory across multiple liquidators.

The Size of the Liquidation Market

In the United States alone, the liquidation market is worth nearly 150 billion dollars. Moreover, many flea markets, auction sites, big-box retailers, and online retailers source their products from liquidation companies. Interestingly, even within liquidators, many resellers will purchase products from bigger liquidators and then refurbish, sort, or repair the merchandise in order to increase its value. Then, they will try and reap large profits by re-selling the products to B2C sellers.

A Summary of the Benefits of Retail Liquidation

In sum, having products in stock is essential to keeping both vendors and consumers happy. However, surplus inventory can occasionally be detrimental to the wellbeing of a business. If your company is currently struggling to move excess inventory, and is struggling financially as a result, then working with a retail liquidator may be the ideal solution. A retail liquidator will take the inventory off your hands and help free up space while also keeping your company’s cash flow positive.

Hence, if you are having trouble moving certain products, or need to sell perishable products before they expire and are rendered worthless, then liquidation may be right for you. The immediate cash that liquidation provides can then be reinvested to purchase new products and inventory, or can be put towards sales and marketing efforts. If you would like to learn more about our liquidation services, then please contact Michael’s Global Trading (MGT) through our website or call us at 888-471-5066 for a free, no obligation quote and consultation. MGT is an auction and liquidation company that also offers professional appraisal services.

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Marlon McPherson is the CEO of Michaels Global Trading, certified appraiser and liquidator in Toronto, Ontario. With over 7 years of experience in the industry, he has worked with companies such as Druxy’s Deli, Blackberry and Thomson Reuters. Marlon is very involved in the day to day operations of MGT from marketing messages to sales meetings. When not working Marlon enjoys spending his time wine tasting, travelling and cooking at home with his family.

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Michaels Global Trading

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