Liquidation is never a word any business owner wants to hear. The immediate thoughts associated with liquidation often include bankruptcy, debt, store closings, and so on. However, most people fail to realize that liquidation is an important strategy for all businesses. Through liquidation, a company can turn obsolete, overstock, salvage, returns, and other excess inventory in to immediate cash and working capital.

Liquidation is a process that all companies have to go through at some point in time. There are two forms of liquidation: compulsory liquidation and voluntary liquidation. When a company denies liquidating for most of the businesses lifespan, they typically end up using compulsory liquidation. Compulsory liquidation is when a business is forced to liquidate by law: the process to obtain as much cash as possible in as little time. It is used to lessen the debt a company owes to a bank or lender before they close their doors. The other type of liquidation is voluntary liquidation. Voluntary liquidation is the strategy of minimizing a company’s risk by selling off excess inventory. Fortune 500 companies are voluntarily liquidating all of the time, as it is a key strategy to maximize a company’s profits. Today we will discuss voluntary liquidation, and how the strategy of liquidation can maximize your profits.

Inventory management and control should be very important to all manufacturers, retailers, and distributors. Large inventories always look appealing to consumers, but truthfully a large inventory can be a huge burden on a business. Generally, the greater the size of the inventory, the greater the costs are to maintain that inventory. An enormous amount of businesses fail because they sit on too much inventory. A rule-of-thumb for a business is that they should spend less than 1/3rd (one-third) of their usable cash on their inventory. Regardless of strict inventory management, problem inventory is unavoidable. Sometimes inventory gets hidden, wrong purchases happen, and physical inventory counts are incorrect. Having a reputable liquidator on file is always smart for when these instances arise.

Here is how a reputable liquidator can help you:

1. Receive CASH For Your Obsolete and Excess Inventory

Every business comes to a point where it has some sort of excess inventory: seasonal items such as holiday decor or even clothing only sell during specific time periods, food and consumer goods become short-dated or expired, technology and fashions change so your inventory of corded telephones. Sometimes consumer spending drops and you’re left with merchandise that just will not sell. Regardless of the merchandise, it is costing you storage and maintenance fees, rather than earning you profit. A reputable liquidation company specializes in turning these excess and obsolete inventories in to immediate and usable capital.

2. Brand Protection

It is not uncommon for a company to pay to have their excess inventories destroyed. Typically a company will use this method to avoid their product ending up in the secondary market. Rather than spending money out of your pocket to make your merchandise disappear, a reputable liquidator will pay you immediate cash, while protecting your brand and identity.

3. Controlling The Channels

No business wants to see their recently liquidated merchandise show up in the marketplace. With the wrong outlet, you can be stuck competing against your own products, at their prices! A reputable liquidation company has complete control of where your products end up, and assures you that your decision to liquidate will not affect you.

4. IMMEDIATE CASH WITH NO TERMS

Perhaps the most important and attractive incentive a liquidation company can offer, is the ability to convert inventory [of all types] into immediate cash. Liquidating and taking a small loss quickly will save you substantial money overall in comparison to holding on to merchandise until your last resort: depreciation, storage, labor, and maintenance.

So you see, liquidation is not nearly as bad as the news makes you think. Liquidation does not mean you are going out of business, rather it means that you are being cost effective and lowering your risk. The trick behind liquidation is to comprehend exactly what liquidation is, and making the decision to liquidate at the right time. In the end, liquidation can save you a lot more money than you think.

Have inventory that you need to liquidate? Stop by SELLinventory.com, an industry leader in liquidation for over 25 years, where they pay IMMEDIATE CASH, for your obsolete and excess inventory.

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