Why Your Closeout Business Needs An Exit Strategy.
Often in life, we wait until a change in circumstances to make a big decision. Exit planning is an example of something so many entrepreneurs put off. In the closeout business, our focus is on the here and now decisions: marketing, How to sell excess inventory, cash flow, looking for overstock buyers, finding new markets for slow moving inventory etc. It doesn’t feel like there is the time or the impetus to create an exit strategy, especially if you don’t plan to sell soon. But, you can’t be complacent about exiting your business. A study by Securian Financial revealed that 72% of small business owners have no exit strategy at all. The reality is it can take years to execute a successful exit, so the endgame needs to be in your mind from the start.Closeout liquidators are no different from any other business; they need to have a plan.
Planning an effective exit strategy for closeout liquidators is going to be different for every business. It needs to include a customized plan that accounts for the individual company’s unique circumstances, market and industry conditions, and the goals and time frame of the owner. There’s no one-size-fits-all template you can download and fill out to establish an exit strategy for your closeout business. That being said, every exit strategy is going to incorporate an appropriate combination of the following elements, with minor variations for unique circumstances: Goals, Time Frame, Intentions and what happens next.Businesses that sell excess inventory often deal with owners to are shutting down their business and closing a 3PL warehouse because of slow moving inventory. These are examples of exit strategies that may be planned or unplanned. Overstock buyers often work with companies in need of liquidating stock and getting rid of old merchandise because they are on a path toward an exit.
There is an old saying “If you don’t know where you are going, any road will get you there”. In other words, you must have a plan. Closeout liquidators and overstock buyers buy from companies that sometimes have not done appropriate planning. In some cases they didn’t take into consideration all the obstacles in business and as a result ended up liquidating stock to get rid of old inventory. In other cases, they imported too much inventory and had to sell it to excess inventory buyers. It is also possible they had a wholesale liquidation sale to pay for inventory they shouldn’t have bought. But these companies still need an exit strategy so they don’t end up having to close down completely without a plan.
Selling a closeout business is a complex process that requires considerable preparation time. You’ll want to improve your sales figures, streamline processes to encourage efficiency, and update technology, as they all help to present an attractive proposition to potential buyers. An exit strategy for closeout liquidators should be a major part of your retirement plans, but is also crucial should you suffer ill-health at any point. It allows you to move quickly to sell the business if unexpected circumstances necessitate a rapid sale. You should try to keep a clean warehouse and always sell excess inventory before you accumulate too much dead stock Slow moving inventory can impact a sale of your business because it affects the balance sheet and does not add value. Overstock buyers and closeout brokers can be helpful because they will take all your closeout merchandise in one fell swoop and they can also help to liquidate Amazon stock.
Sometimes it can be hard to let go of something you created, therefore leaving you hesitant to leave your wholesale closeout company. An exit strategy prepares the entrepreneur for departure by reminding him/her of the goals to be achieved throughout the duration of the operation. Overstock buyers have often spent years or decades in the closeout business and don’t know what else they would do. After spending so much time liquidating inventory for other companies and liquidating their warehouses when they close, you would think this would make things easier. The truth is only 14% of all businesses are in the process of planning an exit strategy, and another 14% actually have a plan in place.
Merchandise USA is a liquidation company in business more than 35 years. We specialize in buying overstock items, surplus merchandise for sale, and slow moving inventory. We are wholesale liquidators for all products including closeout toys, overstock housewares and liquidations of all consumer products.
