Should I Shut Down My Business and Liquidate The Entire Inventory?
Closing a business is a difficult decision, but sometimes it is the best option. If your business is no longer profitable, or if you are facing other challenges, liquidation may be the best way to move forward if you have already tried to create profits by getting rid of old inventory, selling closeouts, clearing old excess stock from the warehouse , and examining the closeout process and liquidation process.
There are a few factors to consider when deciding whether to shut down your business and liquidate all inventory.
- The financial situation of your business. If your business is losing money, liquidation may be the only way to recoup some of your losses. You can also use the proceeds from the liquidation to pay off debts and other obligations. Keep in mind if you have a large inventory that has already been paid for, you can try the liquidation process of selling closeouts, overstock inventory and excess stock first. Perhaps clearing all the old stock from your warehouse will create enough cash flow to keep you alive for awhile longer.
- The future prospects of your business. If you believe that your business is no longer viable, liquidation may be the best way to end things on a clean slate. However, if you think that your business could be profitable with some changes, you may want to consider other options, such as selling the business or seeking funding. If you have dead stock in the warehouse that is creating your problems, you might consider getting rid of all the unwanted inventory and starting fresh with new products.
- Your personal circumstances. If you are facing personal challenges, such as health problems or family issues, liquidation may be the best way to reduce your stress and focus on your personal life. Sure, you can hire another person to take on running your business, but if you don't already have someone in place it may be too big a challenge to find an outsider.
If you decide to shut down your business and liquidate all inventory, there are a few steps you need to take.
- Notify your employees. You need to give your employees as much notice as possible, typically two weeks. This will give them time to find new jobs. Companies that specialize in buying and selling excess inventory are called closeout liquidation buyers. If you think liquidating your inventory will help, you can find surplus inventory buyers by doing a simple google search. Use terms like these: closeouts, closeout buyers, liquidation buyers, inventory liquidators, overstock inventory buyers, shutting down operations, closing business, shutting down warehouse, closing down operations, clear stock from warehouse.
- Contact your creditors. You need to let your creditors know that you are closing your business and that you will be liquidating your assets. This will help to avoid any surprises. If you recently purchased inventory and you want to be upfront with suppliers, you can ask if they want to accept returned inventory.
- Set a liquidation price. You need to set a liquidation price for your inventory. This price should be low enough to sell the inventory quickly, but high enough to recoup some of your costs. Inventory liquidators can be helpful in the closeout process and getting rid of overstock inventory and closeouts.
- Market your inventory. You need to market your excess and closeout inventory to potential buyers. You can do this through online classifieds, auction websites, or word-of-mouth. You can also search online for closeouts, closeout buyers, inventory liquidators, closeout buyers and liquidation companies.
- Hold a liquidation sale. Once you have found buyers for your inventory, you can hold a liquidation sale. This is a great way to sell your inventory quickly and for a good price. You can get rid of closeout housewares as well as overstock inventory of lawn and garden products, closeout pet products, and any excess inventory you may have in toys, sporting goods, home goods and closeout hardware products.
Liquidating a business can be a complex process, but it can also be a rewarding one. By following these steps, you can ensure that the liquidation process goes smoothly and that you get the most out of your assets while getting rid of the entire inventory and clearing out your warehouse at the same time.
Here are some additional things to consider when deciding whether to shut down your business and liquidate all inventory:
- The cost of liquidation. Liquidating a business can be expensive, so you need to factor in the cost of hiring a liquidator, marketing your inventory, and holding a liquidation sale. Closeout buyers will probably be able to purchase your entire liquidation inventory in one fell swoop, but keep in mind they will have to re-sell your closeouts to other discounters and they will want to make a profit.
- The time it takes to liquidate. Liquidation can take several weeks or months, so you need to make sure that you have the time to see the process through. If you are shutting down your warehouse and need to clear out stock fast, you need to let any inventory liquidators know your schedule so they have time to book trucks and make arrangements to empty out the warehouse. If you have your excess inventory stored in an outside 3PL warehouse, you should allow for more time. These outside 3rd party logistics warehouses are often busy with many projects and they need time to liquidate your inventory.
- The emotional toll of liquidation. Liquidating a business can be an emotional experience, so you need to be prepared for the challenges that come with it.
If you have decided to shut down your business and liquidate all inventory, there are a few things you can do to make the process easier.
- Get organized. Before you start liquidating, take some time to get organized. This includes inventorying your assets, creating a liquidation plan, and contacting your creditors. Some inventory may be more valuable than others, so you should figure out what you want to sell to regular closeout buyers, versus what you need to really get rid of to inventory liquidators and wholesale overstock buyers.
- Be patient. Liquidation can take some time, so be patient and don't expect to get everything done overnight. Different inventory liquidators may want to buy different things. In other words, you may find that one company specializes in buying closeout housewares and closeout home decor. While another inventory liquidator may specialize in buying excess inventory of pet products and lawn and garden inventory. Different buyers may want to handle abandoned inventory and unwanted inventory for auctions.
- Stay positive. Liquidating a business can be a difficult experience, but it is important to stay positive. Focus on the fact that you are taking steps to move forward and start a new chapter in your life.
Shutting down a business and liquidating all inventory is a big decision, but it can be the right decision for some businesses. By carefully considering all of your options and following the steps outlined above, you can make the liquidation process as smooth and efficient as possible. Merchandise USA is a reliable inventory liquidator in business since 1984. We can help with the closeout process and liquidation process if you have too much inventory in the warehouse and need warehouse space. If you work with a 3PL logistics company and are shutting down operations, we may be the perfect inventory liquidator for you. We specialize in closeouts, overstock inventory and buying unwanted inventory of lawn and garden closeouts, pet product closeouts, home goods excess inventory and other abandoned inventory.