The Disadvantages of a Liquidation Auction
There are many different ways to reduce your surplus inventory but one of the most popular methods is a liquidation auction. This can have its benefits but also its drawbacks. This article explains why you may want to go with another option rather than a liquidation auction to dispose of your problem inventory.
When using a liquidation auction, the perception is that your goods can be moved relatively quickly. There are no guarantees though and it may take awhile for your inventory to turn over. Meanwhile, your capital is still tied up in assets that aren’t moving. This hurts your business because you may not have the resources available to take advantage of other opportunities until this inventory is sold. Keeping up with the liquidation auctions can be very time consuming as well.
With a liquidation auction, you also forfeit control of the sales channels and brand control. Bidders for your surplus inventory could potentially become your competition. Not only would this hurt your sales, but it would jeopardize the integrity of your brand as well. With such little control over how your inventory is sold in a liquidation auction, you have to be aware of the impact to both your sales channels and your brand image.
Costs may be higher when using a liquidation auction too, because the auction is in effect the middleman. Not only are you paying a percentage to the auction house, but you’re also paying for the auctioneer and all other expenses.
If this raises doubts in your mind about a liquidation auction, there are other methods that can work better. One of the best is to use a liquidation company. A liquidation company is quite different from a liquidation auction as listed in the points above.
A liquidation company usually pays cash up front, which means you’re not worrying about how long it takes to sell your inventory. There’s also the added assurance that your inventory is sold through protected channels so that you are not putting your pricing or brand at risk. Also, you can deal directly with a single company so you can cut out the cost of a middleman. Working with a trusted liquidation company solves many of the problems that a liquidation auction can pose.
To find a trusted liquidation company to help with your problem inventory, go to Channel Control Merchants or call 1-877-279-3353 for your FREE quote today.
