Inventory management is an essential business process, and it’s particularly important for wholesalers and distributors. Too much excess volume means tying up capital and taking up warehouse space. These translate to opportunity costs, specifically the lost opportunity to buy and store faster-moving stocks. Likewise, when you have too little inventory, you can lose out on potential sales (and profit).
This is where strategic inventory liquidation comes in. Do you have excess air filters, tail lamps, fog lamps, and car batteries? There are places where you can liquidate wholesale automotive supplies online.
On the one hand, suppliers, wholesalers, and distributors with excess inventory they wish to unload can use stock liquidation to convert surplus into capital and turn a sure loss into revenue. Likewise, suppliers, wholesalers, and distributors who need stocks quickly, who have a receptive market or who have unutilized capital can turn to inventory liquidation platforms to find stocks they can immediately sell.
Are you a wholesaler with excess stock to sell? This article talks about three techniques you can use to get rid of excess inventory so you can maximize the value you can capture from your slow-moving or unsold stocks.
The following are a few surplus liquidation strategies you can use:
1. Leverage B2B Liquidation Platforms
Digital e-commerce inventory or surplus stock liquidation platforms give you an easy and convenient way to sell excess stock. These platforms connect wholesale suppliers with surplus inventory to wholesale buyers looking for discounted products.
Example: A footwear wholesaler with excess stocks of last year’s designs can list its surplus items on a liquidation platform. Buyers from emerging markets, where style trends may not change as rapidly or where last year’s designs may remain in demand, can buy the wholesale seller’s stocks.
Benefits
What are the benefits of using a digital inventory liquidation platform?
First, e-commerce liquidation platforms let you list your stock in bulk. One transaction can get all surplus inventory off your hands, books, and warehouse. Platforms typically offer auctions and lots deals.
Second, they give your listing exposure to a large network of potential buyers – other wholesalers, distributors, and suppliers – who may already be looking for exactly the products you wish to unload. This improves the chances of you making a sale.
Third, inventory liquidation marketplaces can take care of end-to-end logistics. They may pick up your stock from your warehouse and ship items to your buyers on your behalf.
Fourth, some platforms offer value-added services. These can make it easier to unload excess stocks. Value-added services can include:
● Cleaning
● Inspection
● Palletizing
● Sorting
● Tagging
● Shrink-wrapping and packaging
● Pick-up handling
Fifth, some platforms also offer sourcing services. This directly benefits buyers who have no time to sort through all available inventory. They can tell the inventory liquidation platform exactly what they need. Sourcing services also indirectly benefit sellers because a sourcing service adds another avenue by which buyers can discover their products.
Sixth, e-commerce inventory liquidation marketplaces charge reasonable facilitation fees. This, plus the other benefits mentioned earlier (e.g., exposure to a large network of potential buyers, a shorter time-to-sale, and the add-on services available), means sellers have lower overhead costs compared to traditional liquidation methods.
2. Partner with Discount Retailers
Selling directly to discount retailers and clearance stores allows businesses to offload large quantities of excess inventory at once. Discount retailers specialize in selling products at reduced prices, so they have steady demand and are capable of taking your surplus off your hands as long as you sell your stocks to them at a significant discount.
Example: Suppose a wholesaler of electronics has a surplus of smartwatches released two years ago. The items are barely moving. Instead of writing them off, the wholesaler chooses to sell its surplus to a discount chain that specializes in affordable electronics.
In exchange for assuming the burden of selling and moving slightly outdated products, the discount retailer saves on costs.
Benefits
Why should you consider using this strategy?
First, it lets you move a considerable amount or volume of inventory with every transaction. You can set a high minimum purchase volume threshold or use a tiered pricing scheme. Either will encourage retailers to buy higher quantities.
Second, maintaining a network of discount resellers means lower marketing and promotional costs. Having discount retailers on your list of contacts means you need to make only a few calls to unload your excess stock.
Third, having a ready network of discount resellers also translates to a consistent liquidation channel for recurring surpluses. You won’t have to worry anew every time you have excess stocks because you have a ready list of distributors to sell them to.
3. Implement Flash Sales and Promotions
Offering deep discounts through flash sales or clearance promotions is a direct-to-consumer approach to moving unsold inventory. You can promote these sales through your existing channels — your online shop, an e-commerce platform, your social media platforms (Facebook, Instagram, X, TikTok) — or via email marketing.
This strategy is geared towards value-hunters or customers who are sensitive to price.
Example: A water pump distributor has an excess inventory of lift station pumps. To sell its surplus pumps, it can launch a one-day “warehouse clearance sale,” offering from 50% to 70% off the products’ regular prices.
This technique can help quickly clear out excess inventory. The emphasis on how much customers can save and the limited availability of stocks lead to a feeling of urgency and, thus, a compulsion to buy.
Benefits
What are the benefits of launching clearance sale events?
First, it improves your customers’ affinity with your store. It makes your customers happy because they can get your products for less.
Second, it allows you to tap into previously unreachable demographics. The lower prices mean those who are interested in your products but find your prices initially prohibitive may finally give you a try.
Third, selling directly to consumers is a good way to generate quick cash.
Fourth, selling your excess inventory directly to your customers may let you realize a higher return or a higher revenue than selling to a discount chain or a wholesale buyer.
Embracing Surplus Liquidation
There are several ways wholesalers, suppliers, and distributors can sell excess inventory and their slow-moving stocks. First, they can list their surplus on a digital inventory liquidation platform. Second, they can sell their surplus directly to discount retailer chains. Third, they can launch clearance sales events and sell directly to customers.
Each strategy has distinct benefits, so choose whichever technique will help you accomplish your goals. You can even combine them to capture maximum value.
Disclaimer:
CBD:
Qrius does not provide medical advice.
The Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act) outlaws the recreational use of cannabis products in India. CBD oil, manufactured under a license issued by the Drugs and Cosmetics Act, 1940, can be legally used in India for medicinal purposes only with a prescription, subject to specific conditions. Kindly refer to the legalities here.
The information on this website is for informational purposes only and is not a substitute for professional medical advice, diagnosis, or treatment. Always seek the advice of your physician or another qualified health provider with any questions regarding a medical condition or treatment. Never disregard professional medical advice or delay seeking it because of something you have read on this website.
Gambling:
As per the Public Gambling Act of 1867, all Indian states, except Goa, Daman, and Sikkim, prohibit gambling. Land-based casinos are legalized in Goa and Daman under the Goa, Daman and Diu Public Gambling Act 1976. In Sikkim, land-based casinos, online gambling, and e-gaming (games of chance) are legalized under the Sikkim Online Gaming (Regulation) Rules 2009. Only some Indian states have legalized online/regular lotteries, subject to state laws. Refer to the legalities here. Horse racing and betting on horse racing, including online betting, is permitted only in licensed premises in select states. Refer to the 1996 Supreme Court judgment for more information.
This article does not endorse or express the views of Qrius and/or its staff.
Stay updated with all the insights.
Navigate news, 1 email day.
Subscribe to Qrius