I’m Shutting Down My 3PL Warehouse. Where Can I Sell The Excess Inventory?
When you’re faced with closing your doors, selling your inventory to closeout distributors effectively can mean the difference between paying off your debts and filing for bankruptcy. Selling overstock and getting rid of closeouts when you are shutting down takes some patience and planning. With enough money from an inventory liquidation, you might have enough to regroup and start another venture. If you liquidate inventory too cheap the funds may not be enough, but if you aim for the moon and try to liquidate inventory for too much your warehouse will always be filled with merchandise. Understanding your options for closing out your inventory will help you make the best decisions for your situation and the best closeout process. Inventory liquidation buyers expect a substantial discount because they re-sell to closeout brokers, closeout websites and other closeout distributors.
If you are ready to walk away from your business with a loss, you have more options for liquidating your inventory than if you need to maximize your revenues. Selling overstock inventory is easy when you don't care how much you get for it. But if you want to liquidate inventory for top dollar and get the most out of your closeouts you will have to work a little harder. Decide if you want a quick exit or maximum value for your liquidation inventory. You can find a wealth of information online and a simple Google search for closeout distributors, closeouts or surplus inventory buyers will get you off in the right direction. The closeout process is relatively easy if you allow enough time for some basic research of companies for selling overstock and liquidation buyers. Set a deadline for your liquidation and more than one amount you’ll accept for your inventory based on different sale dates. For example, early on, you might want to try an in-store sale to maximize income, while at your deadline date, you might donate leftover inventory to a charity to take a write-off and lower your tax burden. You can also sell overstock inventory to one of your competitors at very low prices just to get it out of the warehouse. Discuss your options with an attorney if you believe you might have to declare bankruptcy. Debtors might challenge your sales if they appear too discounted or too low a percentage of original cost of goods.
Ask your vendors if they would like to buy their products back. Sometimes closeout distributors aren't as good an option as a business that is already familiar with your inventory. Depending on what the inventory is and what condition it’s in, your vendors might be able to resell it to other customers as off priced or discounted closeouts. Be prepared to take a more significant loss than if you try to sell it retail or to bulk buyers. Your suppliers won’t offer you what you paid for it, however, because it’s cheaper for them to sell their own inventory and clear out their own warehouse.
If you’re looking to move your inventory without selling it piecemeal, contact your competitors to gauge their interest. In addition to direct competitors, contact resale and thrift shops that don’t often get the opportunity to buy new items. Set a liquidation price for your entire closeout stock, which they might not want, then entertain bids for what they want. By the time they cherry pick, you might not have enough left for a sale. However, a donation might close the gap and make it worthwhile for getting rid of inventory at closeout prices. If you feel you can move the inventory piecemeal with a more drawn-out sale, set a firm price for the entire lot -- your competitor can still make a profit from the item he wants to sell, discounting or donating the rest. If you can’t move your items fast locally, offer them for sale online. The closeout process should be the same for flea market vendors, nonprofits, thrift stores, liquidators and other bulk sellers scour the Internet for deals and might drive to your location and truck your items off for individual resale. Be prepared to break your inventory or ship it, calculating shipping prices before you agree to any sale that requires you to send your inventory to a buyer. You always have to be clear when selling dead stock how much you are willing to take for it, and whether it includes the cost of shipping.
Unless your warehouse is run to the optimum levels of efficiency and delivers an impressive ROI, you will probably find that outsourcing your warehouse will bring cost savings over the long term. If you are shutting down your warehouse it is possible you can liquidate to closeout websites or find bulk inventory buyers for everything. Since the warehousing firm is experienced in fulfillment and working for a variety of different clients they will be able to bring their overheads down and pass on savings to their customers. You can take advantage of shared networks of delivery and you benefit from economies of scale that you otherwise could not have taken advantage of. Deliveries can also be picked and packed at any time during the day or even the night, making your customers happier. Closeout wholesalers running online closeout websites like Shopify or other deal sites may need to have closeouts picked 24/7.
When you are running your own warehouse it is almost impossible to save money when you have a reduced flow of stock. You still have to rent the space, and you still have to pay your staff, even when you are going through a slowdown. With closeouts, there will always be slow times when bulk closeout buying is reduced and the warehouse is slow. There are other times when companies liquidate inventory at a much faster pace and you cannot keep up. When you outsource your warehouse facilities you can benefit from a flexible space that can be scaled up and down as you need it, and you only pay for what you use. You don’t have to worry about letting staff go, or training new staff when you get busy periods.
Running a warehouse can be a big drain on your resources both mentally and financially. Packaging company experts will take it off your hands and you can focus on the activities that directly grow your business and help you attract more customers and win more sales. Shutting down your warehouse, selling obsolete inventory or having an overstock liquidation sale and transferring this task to another company takes away stress and hassle that is associated with managing an aspect of the business that is not directly related to business growth. The closeout process is vitally important to inventory management, which has a direct affect on the bottom line, but it is not directly helping with the closeout companies growth. As you consider divesting yourself of the business, think about what you would like to happen next. Who should lead the company once you have moved on? For many family-owned business leaders, this is a simple question with a simple answer.
If you have a family member that’s been groomed to take over upon your retirement, you might be in luck. However, it’s important that you make sure taking over the business is what they want. All too often family business owners operate on the assumption that a child or other family member will want the business when they are gone. Once it is time to pass on the business, the successor may take on the job out of duty rather than desire—or worse, may refuse the role altogether. If the next generation of your family wants to go all-in on the business, that’s perfect. Your legacy is secure. Time to buy a boat and plan out your retirement. But if your next generation is saddled with an obligation they did not ask for or want, it is possible the business may begin to fail, leading to job losses, income loss, selling off inventory to pay bills, liquidating the entire inventory and possibly even filing for bankruptcy.
If not, however, that doesn’t mean you are out of options. Look at the other leaders in the business—your executives, department heads, and managers—and ask the following questions Who would make the easiest transition for your employees and customers? Who do you trust to take over the closeout business and run it successfully? Who could secure the proper financing to purchase obsolete inventory and closeouts from you? Who would be interested in stepping up to lead the company, and perhaps even grow the business into a leader in the closeout industry? If someone in your employ is the answer to all these questions, you may have found your successor. In this scenario, you aren’t bequeathing the bulk of your business to a family member, so you retain various options. For example, you could sell the operating company, but retain the real estate and lease it to them to ensure a continued flow of steady income. The overstock liquidation business can be very profitable if the right people are running the show. Buying and selling excess inventory can be a lifeline for generations to come if the closeout process is followed and the business is properly run. If there are no options for this, it may just be best to liquidate the entire inventory, get rid of everything in the warehouse, cash out and move on.
Merchandise USA is a bulk inventory buyer in business 37 years. If you have excess inventory to sell please contact us for a quote to buy your entire inventory. We specialize in closeout toys, overstock housewares and obsolete liquidation stock from Amazon FBA warehouse closures or 3PL warehouses shutting down or moving locations.
