Why a web-based solution should be key to your returns and overstocks strategy
The rise of online shopping is thought to be a major factor in the decline of brick and mortar foot traffic. As a convenient solution for today’s busy lives, it is expected that online spending will only continue to increase with the advancement of current technologies and applications. Whether a small business closing for good or retailers receiving a wave of online returns, organisations worldwide are left with masses of excess inventory to sort out behind the scenes.
The rising problem of excess inventory
The start of the year marks the beginning of the dreaded ‘returns season’ for most retailers and in the wake of the busy holiday shopping period, many unwanted gifts end up being returned, both in-store and online.
This, combined with the growing trend of ‘serial returners’, who return an excessive amount of merchandise after purchasing with either dishonest intentions or inability to control their shopping behaviour, means retailers are often faced with an ever-increasing volume of excess stock. To combat this, retailers need to think strategically about what to do with this returned and excess inventory, especially the stock that can’t go back on primary shelves. A web-based B2B marketplace solution is one way to go.
If when someone asks “how do you deal with excess inventory?” you respond by saying you have a couple of wholesalers that you sell to, you are doing a disservice to your company and your shareholders, leaving huge amounts of money on the table. The days of that being an adequate and responsible approach are long gone.
Understanding true value
When it comes to dealing with customer-returns and excess inventory slated for the secondary market, it’s extremely important for retailers to understand its true value and reassess whatever program they have in place. In most cases, there is an opportunity to recoup more by ditching traditional, manual methods and applying technology to the process. Below are some points to consider:
If you’ve historically sold your inventory to one or two liquidators your recovery value is probably low, as liquidators – who know they are not being forced to compete – are really good at negotiating prices down in order to maximize their own profits.
Negotiating deals for excess merchandise takes up valuable time which could be spent on completing core, strategic business activities. As a result, this can equate to millions of dollars lost over time, which is quite a hit to companies with already skinny margins.
By eliminating dependence on a small group of buyers and applying technology to your liquidation program you can increase return and in some cases triple digits whilst spending your time wisely. With this in mind, the most effective technology-driven program comes in the form of a web-based solution; this type of solution allows thousands of buyers to compete for the inventory, pushing prices up versus a handful of buyers negotiating them down.
By using a web-based solution, it is likely there is already a robust secondary market and buyer base for your product(s), as there are businesses that purchase excess and returned inventory for resale across every major city in Europe. So how do you gain access to this buyer base?
A customized, private business-to-business, online auction marketplace platform is one way to make this happen. The best platforms available can be configured, integrated and scaled to meet the unique needs of a business.
By implementing this type of technology, it will not only deliver the highest possible price in the market at the moment, but it will also automate the sale process, deliver a faster sales cycle and generate proprietary market intelligence in the form of real data on market prices.
World-class, purpose-built technology
Applying next-generation technologies to the liquidation process will have a big impact on the bottom line, sometimes leveraging this with expert knowledge will provide the most effective outcome. By combining world-class, purpose-built technology with a highly experienced team that understands dynamic pricing, online marketplaces and demand generation, you have a winning formula.
In today’s return-happy landscape, every second counts to rethink of the program(s) retailers have in place for the handling and remarketing of merchandise. Every dollar increase in recovery value, or reduction in expense, equals another dollar of profit.
Ben Whitaker, B-Stock’s EMEA director
