The first step in winding down your business is deciding it is time to close. For some business owners, deciding to close can be the hardest step in the liquidation process of exiting a business, getting rid of the entire inventory and shutting down the warehouse. Having too much inventory on hand can lead to an emotional attachment that is hard to deal with. Once you decide to wind down your business, consulting with an attorney can help ensure you take all necessary legal steps to close your business. You will then go through the closeout process of contacting liquidators to take your inventory and overstock products. Closeouts that you may have paid thousands or even tens of thousands of dollars for will have to be disposed throughout a liquidation sale. If you are not familiar with how to sell closeouts a simple Google search will help. You can look up terms including closeouts, overstock inventory, shutting down warehouse, etc.
After deciding to close your business, several factors, including the business structure, dictate the steps taken to close a business. If you are a sole proprietor and you buy and sell closeouts as an individual, you need not take any special steps to close the business other than deciding it is time to wind everything down. However, if you are incorporated, a member of an LLC, or you have a partner, you need to meet to vote on closing the business and then develop an exit plan for how to contact liquidators and get rid of all the inventory, office equipment, supplies, etc. A simple online search for liquidate inventory, closeouts, sell closeouts, or shut down 3PL warehouse will get you going in the right direction. Having too much inventory at the time you are liquidating may feel stressful, but there are a lot of companies buying liquidation stock for sale, and many of them will be able to make an offer to buy your entire inventory of closeouts.
Consider how you will collect company property, keys to the premises, and other items that employees may have in their possession that belong to the company. Letting go of good employees who have been with your for years is not easy, especially if they are closeout buyers and liquidators who you have trained and mentored as you built your business. Always review state and federal employment laws to ensure that you comply with termination policies for employees, including final pay, benefits, and retirement accounts. If your company was an Amazon seller you may have excess inventory sitting in Amazons FBA warehouses. In order to liquidate Amazon inventory you will have to issue removal orders to get rid of too much inventory. You can either ship these products to your own 3PL warehouse and store them as old inventory or excess inventory. It would be better to find a closeout buyer willing to allow the removal order be sent directly to their liquidation warehouse. Not only will this option be cheaper for you so you aren’t spending more money to store old inventory you need to get rid of. But it will also force you to dispose of all the inventory now rather than just kicking the can down the road and having to liquidate everything later.
Most businesses can be successfully liquidated for cash in a matter of weeks, and sometimes sooner. However, doing so requires excellent planning, strategic marketing, and a network that extends beyond a business’ existing customer base. Rarely are these conditions present when sellers attempt to liquidate a business themselves. Fortunately, there are liquidators, overstock inventory buyers, closeout buyers and closeout websites that can help you git rid of too much inventory. Disposing of unwanted inventory is a necessary evil and part of any liquidation process. If you wait too long you might end up paying money to fill dumpsters with dead stock, when you could have sold it to closeout distributors or closeout brokers.
The most common business liquidations include business inventory, furnishings, and equipment. Almost any business assets can be sold in this manner, including, for example: those of a manufacturing plant, distribution center, retail store, service business, restaurant, or any number of other businesses. There are different liquidators for different categories. Some closeout buyers only take inventory, while other buyers for liquidations might specialize in office supplies or warehouse equipment. Don’t be surprised when you are only getting offers for pennies on the dollar. When liquidating inventory or other hard assets, they only retail a very small percentage of original value.
In order to achieve true market value, successfully liquidating a business will almost always necessitate a professional auction. With an auction, buyers must compete against each other, and there is no price ceiling as there is with priced sales. There is also a known sale date, which gives you more control over the process. An auction liquidation can be scheduled, arranged, and conducted in a very short amount of time, further helping to eliminate expenses. This is a great way to liquidate fast and immediately turn inventory into cash. You can reinvest this money into something else that is more profitable than dead stock.
Business owners always have an eye on their competitors, they try their best to intimate and provide better products and services than their competitors. Competitors are always willing to expand the business by acquiring the assets of competing businesses. A small business owner that wants to liquidate assets can contact its competitors. The owner that is liquidating assets can charge the competitors huge money for the assets, and can also liquidate all the inventory at the same time. Existing businesses that sell closeouts may already be familiar with your operation, making a closeout deal even that much better.
Donating your overstock inventory can offer some other advantages. Donations usually yield tax deductions, for one. But overstock donations can be a cornerstone of your corporate social responsibility program and can help you forge deep relationships with your community. For instance, many charities will accept excess inventory from businesses and distribute it to member schools, churches and charities. Whatever it is, chances are, some nonprofit members can put it to good use,” Donating items to local partners, nonprofits and schools can also be an effective way to move overstock and cultivate community relationships, while clearing stock and emptying your warehouse at the same time.
One of the fastest and easiest ways to sell overstock inventory is by working with merchandise liquidators, closeout brokers and closeout distributors. These companies purchase your inventory at a discount and resell it. Others will resell your inventory for a commission, but this is usually closeout brokers. When choosing a merchandise liquidator, keep these things in mind. Always research a liquidator’s reputation and terms — especially if it’s your first time working with one or if you found them online. Be aware that some liquidators and overstock buyers will cherry-pick the best merchandise, so it might not be the solution for everything you’re looking to unload. Be realistic about price. You might recoup expenses or minimize losses, but you won’t to turn a profit when working with a liquidator. In fact, you won’t even be able to recover all of your inventory costs. For example, you may have bought inventory in China and paid $10 for something, plus another $2.00 to ship it to the United States. Add in your storage fees and any warehouse costs and you may already be up to $15.00 per item. But liquidators and surplus buyers have to buy merchandise very cheap in order to move through it so they may only offer you 10% or 20% of your cost. This means when liquidating inventory you will likely take a large loss, so it’s always best to try other options before deciding to get rid of inventory and clear out your warehouse.
Merchandise USA is an overstock buyer and we have been in business more than 37 years. We buy closeout toys, closeout home decor and housewares, and we are always liquidating warehouses filled with sporting goods, giftware, etc.