If you are closing a warehouse or need to sell excess inventory, this is not normally much of a challenge. But if you are trying to get rid of obsolete products and sell large quantities of products in a bulk sale during inflationary times, it may take some extra work. You can turn to closeout websites and wholesale overstock buyers to help you through this process.
We usually see inflation when the economy is overheated and about to slow down. Closeout websites have done exceptionally well lately because there has been so much demand for closeouts and obsolete products. With the pandemic becoming more manageable in some parts of the world, consumers have been on a spending spree for everything from sporting goods closeouts, housewares excess inventory, home accessories and much more. It is easy to sell excess inventory and closeouts in this environment as long and things don’t get out of control. But once the Fed views our economy as “over-heated”, interest rates will go up making it more difficult for business to borrow money.
This means less investment in new business, inventory and labor and often results in slower sales. If this pattern escalates we will enter a recession. During a recession, the closeout industry and closeout buyers often manage to stay afloat because they are selling discounted merchandise and overstock. Traditionally, there has been demand for obsolete products, overstock goods and closeouts during slow times because the average consumer needs to save money and has less discretionary income. Closeout websites will flourish as buyers turn to online spending because they don’t want to spend money on gas driving to stores and they don’t want to be tempted once inside to spend more on things they don’t want or need.
If inflation continues to rise, it can become impossible for leveraged business to keep up. Companies in growing numbers will sell excess inventory and close a warehouse to stop the bleeding, contain spending and raise or retain cash. Closeouts become more popular during difficult times because regular and high end merchandise stop selling. Consumers turn to deep discount goods and look to companies selling their obsolete products and dead inventory at steep discounts. Big box discount chains will do well during these times because consumers want to save as much money as possible and get the most for their money.
Companies that shut down and close a warehouse during a recession are often hit the hardest. In many of these cases they owe money to banks and are leveraged to a point where they can’t recover. It is always a good idea to sell excess inventory, but even more important to be lean and mean during inflationary times.