5 Challenges Every Closeout Business Faces.

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To say the very least, this is a difficult time to be in business. What has happened since Covid-19 began is hard to understand. It’s even more challenging to figure out if we will ever get back to normal. For those of us who specialize in selling dead stock and closeouts, there are all kinds of new challenges. If you sell excess inventory for a living you are dealing with a whole new set of rules. It isn’t as easy as it used to be to get rid of old merchandise because the entire selling landscape has changed. It used to be a no brainer to sell excess merchandise, but now there are many more issues to complicate things.

1. Competition.There is more competition than ever. You are competing with other companies that sell excess inventory and closeouts, you are competing with other buyers of dead stock and obsolete goods, you are competing for trucks to move your products. In addition, you are competing with charities who often get merchandise donated as a method to get rid of merchandise.

2. Uncertainty.Let’s face it, there is a lot to worry about. At this point there may be more things we don’t know than we do know. Will interest rates spike? Will the consumer continue spending? Will the labor market loosen up? Will there be a recession leading to excessive amounts of closeouts? Will companies all want to get rid of merchandise at the same time? Will there be a recession? Too many questions and not enough answers. Uncertainty is the enemy of investment because businesses are afraid to invest when they are unsure of where the economy is headed.

3. Staffing.It seems we are in a new economy where there is a global shortage of millions of workers. There are deficits of truck driver, nurses, pilots, farm workers, warehouse workers and chefs. And all at a time when everyone wants more of everything. It’s the perfect storm. It’s easy to do business and sell excess inventory to buyers, but then there aren’t enough workers to pull the orders, then not enough trucks and drivers to ship the freight.

4. Cybersecurity.You don’t have to be a large company to be hit by cyber criminals. Today, even small accounts get hacked and lose all their data, records and computer files. Whether you have a company that sells dead stock, buys and sell closeouts, or manages retail stores, you are at risk. Everyday, hackers steal data from individuals and companies and disrupt normal closeout business activities. There are many cyber security services available to protect against the unauthorized or criminal use of electronic data

5. Cash Flow.Having enough available cash is paramount to being successful in the closeout business. When approaching companies wanting to get rid of merchandise and sell excess inventory, buyers must be in a strong cash position so they are financially capable of purchasing large amounts of dead stock. Many importers and distributors today are sitting with a huge volume of excess inventory due to Covid-19. This requires buyers to be flush with cash so they can easily handle the purchase of such inventories.