Liquidating An Operation With Multiple Distribution Centers

Sometimes liquidators have to deal with emptying out multiple distribution centers at one time. Often when a large company is going out of business, it may have multiple facilities filled with closeouts. International companies with distribution around the world often operate from different warehouses, making the challenge to sell excess inventory a little more complicated.

Most buyers of closeouts prefer to have all inventory consolidated in a central facility for easy loading. If freight brokers have to make multiple appointments at different locations is becomes for costly and much less efficient. So it is in the sellers best interest to consolidate the closeouts and try to localize everything in one central warehouse. This can be their own distribution facility or a 3PL warehouse that specializes in helping companies consolidate when they are going out of business.

If all the distribution centers are in proximity to each other, it would be possible to schedule various pickups, even if multiple stops have to be made to fill a truck. But if locations are hundreds or thousands of miles apart, it becomes more difficult to sell excess inventory to any buyers who aren’t interested in having to make multiple pickups.

If one warehouse is larger than the others, it can become the headquarters where all inventory can be consolidated for shipment. Most liquidators will prefer to have one central shipping location, whether it is one truck or multiple shipments. From the seller’s perspective, it may be more costly to have to incur the expense of moving everything, but it may also be the only way to find a closeout buyer.

When a company is going out of business and has to sell excess inventory, it is important to consider the logistics any buyer will be forced to work with. Liquidators are accustomed to buying discontinued inventory, overstock merchandise and obsolete goods from central warehouse locations. When sellers have inventory spread out over multiple warehouses, it does not mean that’s a deal breaker. It can be worked out and dealt with; it just isn’t an ideal situation.

Over the past few years, in addition to warehouse closures the United States has seen many well-known retailers experience financial troubles resulting in store closures and bankruptcies. Especially now, with the ongoing global pandemic, the rate of business closures due to excess inventory and too much closeout merchandise that isn’t selling has been accelerated. However, some storefront shutters are not due to financial issues but attributed to changing business models and shifting practices to appeal to customer demands.