As any business grows it tends to accumulate inventory that it doesn’t need for everyday operations. This excess inventory can become a problem when it begins taking up valuable warehouse space needed to bring in new merchandise. If you are closing a 3PL warehouse, the first thing to do is get rid of any overstock inventory and sell your closeouts. When you sell excess inventory you immediately make things better because you free up cash and warehouse space. Closeout wholesalers and opportunity buyers are always in the market to help out in situations like these.
A simple online search will turn up dozens of qualified closeout wholesalers who can help. These overstock buyers often have decades of experience in helping businesses work through the process of moving old stock and navigating the liquidation process. It is possible for a wholesale warehouse to sell excess inventory direct to retail customers without the need for wholesale liquidation buyers, and some of the largest retail closeout buyers could be big box stores like Dollar Tree, Five Below, and Family Dollar. These chains specialize in carrying closeouts and liquidation stock at low prices.
The liquidation process for selling closeouts varies, depending on the reason for the wholesale liquidation. If a company has accumulated too much stock due to slowing sales, it simply needs to reduce the cost in order to sell excess inventory and free up space. But if the company is closing and liquidating it may need to have a broad wholesale liquidation or warehouse sale. This can be the quickest and most effective way to clear out old inventory in a timely manner if the company has to move or is closing a 3PL warehouse.
It is important to know whether the closeout liquidation is voluntary or compulsory and whether or not the company is solvent. The procedure will be handled differently for a compulsory liquidation that it would be dealt with in a voluntary liquidation, so the following information is just a broad overview of the process. Compulsory closeout Liquidation – In this case, creditors petition the Court to liquidate the company because they believe it to be insolvent and incapable of paying its debts. This may happen when a large importer has too much excess inventory and not enough cash to cover operating expenses. Members Voluntary Liquidation – When a company is solvent and able to pay outstanding debt, a Members Voluntary Liquidation can be commenced. There is no court involvement in this closeout process and the business will sell excess inventory, shut down its warehouse or close it’s 3PL warehouse. This can often be done with the help of closeout wholesalers or wholesale liquidators who have experience in the closeout process. But the first step would definitely be to sell excess inventory and begin a voluntary liquidation.
Keep in mind if you are liquidating your business you can begin by making plans to shut down your 3pl warehouse and sell excess inventory. But as the liquidation process moves forward you may need to work with organizations that can help you through the process of shutting down. Closing your business can be a difficult choice to make. The Small Business Administration’s local assistance finder can connect you with local guidance in planning your exit strategy. It’s also helpful to seek advice from your lawyer and a business evaluation expert, along with other business professionals including accountants, bankers, and the IRS. Closeout wholesalers will be a good outlet for all the inventory, but likely will not be able to provide you with the legal advice you will also need. During a bankruptcy case, you need to stay up to date with all filing requirements and taxes. Reference the IRS Bankruptcy Tax Guide online for information on debt cancellation, tax procedures, and considerations for different types of business structures.
Liquidating inventory usually comes as a last-resort strategy after no buyers, merges, or successors appear on the horizon. This process of shutting down your warehouse and closing the operation still requires a sound plan of action.
Merchandise USA is and overstock wholesale buyer and excess inventory liquidator. We have been in business 37 years and have an excellent reputation. We can help you with your online liquidations and other excess inventory sales.