What Exactly Is The Meaning of A Recession?

liquidating inventory, clear out warehouse, closeouts

A recession is a significant economic downturn spread across the economy that lasts more than a few quarters. More specifically, the term is typically defined as a period when gross domestic product (GDP) declines for two consecutive quarters. When the economy is in recession companies often have to sell excess inventory to generate cash, and in many cases they go out of business. There are a multitude of indicators that determine if we're in a recession. Perhaps a better way to understand how experts define recessions is to liken it to how Supreme Court Justice Potter Stewart infamously described his opinion on obscenity: Economists know it when they see it. The amount of closeouts on the market increase during a recession as sales often slow down, business becomes more challenging, and cash becomes tighter. Online sellers may experience competition to the point where they are shutting down Amazon FBA accounts and shutting down closeout websites.

In a recession, you may feel these compounding effects a few different ways: jobless claims go up, spending habits change, sales slow down, and economic opportunities dwindle. Recessions are marked not only by a slump in real GDP, but also a decline in real personal income, a drop in manufacturing sales and production, and a rise in unemployment rates. Businesses have more liquidation stock for sale during slow times because they may have too much inventory in the warehouse. Closeouts are more difficult to sell during recessions because companies are going out of business and shutting down amazon FBA accounts. Also, increased competition in general makes business more challenging and increased the demand for importers to sell excess inventory. It is also possible too much inventory was imported and there is not enough demand from customers to buy closeouts. In this case, it becomes necessary to sell dead inventory to closeout brokers and excess inventory buyers

Generally speaking, expansion and growth in an economy cannot last forever. A significant decline in economic activity is triggered by a complex, interconnected combination of factors, An unpredictable event that causes widespread economic disruption, such as a natural disaster or a terrorist attack. The latest example is the recent COVID-19 outbreak. When this happened businesses immediately started to sell excess inventory, liquidate old stock and contact closeout wholesalerswho could buy merchandise quickly. The fear of looming shut downs created an immediate need to liquidate inventory. At the onset, loss of consumer confidence made matters worse and many online companies were shutting down amazon FBA accounts. When consumers worry about the state of the economy, they slow their spending and keep whatever money they can. Because close to 70% of GDP depends on consumer spending, the entire economy can drastically slow.

High interest rates makes it expensive for consumers to buy houses, cars and other large purchases. Companies reduce their spending and growth plans because the cost of financing is too high. The economy shrinks. When consumers spend less money, there is less economic activity and it becomes a viscous cycle. Business sell surplus inventory when regular sales are not good enough and they are forced to get rid of old merchandise to raise cash for expenses. Overstock inventory buyers are often busier during recessions because there is increased demand for their liquidation buyers. Companies that are going out of business, shutting down 3PL warehouses or selling obsolete inventory can be in any industry. There may be toy closeouts, housewares excess inventory or others liquidating lawn and garden products. Liquidation stock for sale comes in all shapes and sizes during a recession.

The Great Recession began in December 2007 and ended in June 2009. Real GDP declined in the first, third, and fourth quarters of 2008 and in the first quarter of 2009. The recession started in the first quarter of 2008 when GDP shrank 2.3%.13 The economy lost 17,000 non-farm jobs in January 2008. During this time there was an unprecedented number of business shutting down, closing 3PL warehouses, and having inventory liquidation sales. Closeouts and excess inventory were available during the entire recession and closeout websites and other liquidation buyers were busy. When measured by duration, only the 30-month employment downturn from February 2001 to August 2003 was longer than the most recent downturn. That's another sign the recession was already underway.

Unlike most recessions, demand for housing slowed first. As a result, most experts thought it was just the end of the housing bubble, not the start of a new recession. The NBER declared the Great Recession over as of the third quarter of 2009.10 It was the worst recession since the Great Depression, with five quarters of economic contraction, four of them consecutive, in 2008 and 2009. It was also the longest since the Great Depression, lasting for 18 months. Wholesale closeout buyers are companies that specialize in selling excess inventory to discount and bargain stores. These retailers often flourish during a recession because consumers have less spending power and look for better deals. Wholesale liquidation companies that buy and sell closeouts and excess inventory cater to these customers.

Merchandise USA helps companies liquidating inventory and buying surplus merchandise. We buy overstock inventory, closeouts, Amazon FBA liquidations, 3PL warehouse closures, and other surplus inventory.