According to Wikipedia, a recession is a business cycle contraction when there is a general decline in economic activity. Recessions generally occur when there is a widespread drop in spending (an adverse demand shock). This may be triggered by various events, such as a financial crisis, an external trade shock, an adverse supply shock, the bursting of an economic bubble, or a large-scale anthropocentric or natural disaster (e.g. a pandemic). Closeout liquidators and companies that buy liquidation stock often do well during recessions because consumers look for values and try to stretch their buying power. Stores buy and sell closeouts in effort to attract buyers, and overstock inventory becomes more popular.
In the United States, a recession is defined as "a significant decline in economic activity spread across the market, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales". In the United Kingdom, it is defined as a negative economic growth for two consecutive quarters. In both cases, companies that buy excess inventory and buy liquidation stock gain popularity as consumers become more price sensitive.
In the United States, a recession is defined as "a significant decline in economic activity spread across the market, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales".In the United Kingdom, it is defined as a negative economic growth for two consecutive quarters. When sales slow down to the point that businesses cannot meet expenses, they often convert excess inventory into cash by contacting closeout liquidators and other companies that bu excess inventory. These surplus buyers specialize in working with companies in bankruptcy, insolvency, or simply closing 3PL warehouses or downsizing. Companies that buy liquidation stock have a large network of customers who look to purchase slow moving inventory and liquidation stock.
In April 2020, the U.S. economy lost an astonishing 20.8 million jobs, sending the unemployment rate skyrocketing to 14.7%. It remained in the double digits until August. Uncertainty over the pandemic’s impact also caused the 2020 stock market crash. Closet liquidators were very busy with sellers of unwanted inventory due to business closures and downsizing 3PL warehouses. There was an increase in demand for companies that buy excess inventory and closeouts. Early in the pandemic many businesses closed because they had to close factories or retail stores due to increased COVID cases. Businesses that buy liquidation sock and overstock inventory did well since they could work remotely and sell excess merchandise on closeout websites and other closeout marketplaces. Discontinued merchandise was in demand as supply chains were disrupted and the normal flow of goods to the U.S. was restricted.
The Federal Reserve lowered the fed funds rate to 0%, promising to keep it there until 2023. Congress issued $3.8 trillion in aid. Although the economy grew 33.1% in the third quarter, it was not enough to make up for earlier losses and many businesses still had to shut down. Overstock liquidators stopped exhibiting at trade shows and began offering closeouts to excess inventory buyers on Zoom and FaceTime calls.
The Great Recession lasted from December 2007 to June 2009, the longest contraction since the Great Depression. The subprime mortgage crisis triggered a global bank credit crisis in 2007. By 2008, the damage had spread to the general economy through the widespread use of derivatives. During this recession the closeout industry did very well and surplus buyers selling excess inventory flourished. Low priced merchandise was the name of the game as major big box retailers were looking to buy overstock liquidations, closeouts, surplus inventory and slow moving inventory. Liquidation buyers and other inventory liquidators learned they could make big profits selling unwanted inventory to surplus buyers and overstock companies around the globe. Some of the largest big box stores include Target, WalMart, Kohls and Burlington.
The 2001 recession lasted eight months, from March to November. It was caused by a boom and subsequent bust in dot-com businesses. The Y2K scare had partially created the boom in 2000. Again, this affected consumer buying patterns and dollar stores and discount stores became popular selling closeouts, excess inventory, discontinued merchandise and other closeouts. Companies bought billions of dollars worth of new software, because they were afraid the old systems weren't designed to transition from the 1900s to the 2000s. Many dot-com businesses were significantly overvalued and failed. This all contributed to slowing sales and businesses having too much inventory and the need to liquidate 3PL warehouses
Merchandise USA is a closeout buyer in business 37 years. We are inventory liquidators specializing in closeouts, excess inventory, overstock and surplus merchandise. We work with Amazon FBA long term storage sellers and other businesses getting rid of closeouts to save money.