Inventory liquidators specialize in taking one company’s problem inventory, and giving it value by bringing it to another market and a different user, at a new price. Companies may want to sell closeout inventory for a variety of reasons, but there will always be excess inventory buyers to take advantage of good business deals. Companies that specialize in this market and buy discontinued merchandise find deals for a variety of reasons. Although there are more scenarios than we can list here, below are the most common reasons liquidators buy surplus or excess inventory.
1. Overstock. The most common reason for closeout sales is a simple overstock situation. At one time or another every company has some excess inventory. For one reason or another they simply have too much merchandise and have to offload some of it. It may be discontinued merchandise from an old product line, it may be product that arrived in the warehouse too late and can’t be sold, it may be an accident where the buyer placed a duplicate order, or it may just be because sales are slower than expected
2. Amazon FBA. Amazon has changed the world for consumers, but in order for sellers to play along they have to follow very strict Amazon rules and regulations. This includes compliance with specific rates of sale, product inventory levels, pricing restrictions, etc. Many sellers either cannot compete or find they just cannot comply, so they have an Amazon liquidation and get rid of all their inventory. Since some of the items are good and get sold off at a huge discount, excess inventory buyers take them and resell them.
3. Natural Disasters. Unfortunately warehouses are often damaged or completely destroyed by floods, hurricanes, tornadoes, fires, etc. Insurance companies often submit the entire claim as a loss, leaving some undamaged products to be sold. In this cases master cartons may be damaged or compromised, but the merchandise inside the boxes is fine. Excess inventory buyers will take this inventory, sort and repack as necessary, then resell it to companies that specialize in buying discontinued merchandise and closeouts. These products may even be sold to an online company that will create an Amazon Liquidation sale.
4 Bankruptcies When companies shut down or go out of business, they have to get rid of inventory by selling to excess inventory buyers or having their own amazon liquidation. When you are forced to sell closeout inventory due to a liquidation sale, the prices are very low so liquidators will buy the entire line of products and resell them into the discontinued merchandise market or discount store market.
5. Canceled orders. Cancellations often result in a company carrying more inventory than anticipated. In these situations it is sometimes better to sell closeout inventory for a loss, re-invest those dollars into something that creates more value for the company, and free up valuable warehouse space at the same time. If you are no longer carrying these items it will just be discontinued merchandise that will sit in the warehouse, maybe for years to come, collecting dust and losing value. It would be better to get rid of it now, take the loss, and move on.
inventory liquidators buy excess inventory for many different reasons. But whether it be a simple overstock situation where a company wants to sell closeout inventory, or a more complex bankruptcy, these types of situations create opportunities for someone to sell excess inventory