Why Are So Many Businesses Shutting Down And Liquidating?

Shutting down liquidating overstock inventory

Closing your closeout business and having a complete inventory liquidation can be a difficult choice to make. Most times an exit strategy did not intend to include overstock companies and wholesale liquidators. Under these circumstances it is best to seek advice from your lawyer and a business evaluation expert, along with other business professionals including accountants, bankers, and the IRS.

Economic conditions are a common reason for closing the business and looking for a closeout buyer. Low national economic growth--often due to a recession or depression--directly affects the company’s operations. Companies in the durable goods or luxury industries can face difficult conditions and economic downturns. Luxury items are high dollar products not needed to maintain standard quality of life, so these companies may have to sell excess inventory and search out inventory liquidators during a recession. During challenging times overstock companies are busy liquidating inventory because there can be too much inventory available and they need to sell merchandise in an effort to make more room in the warehouse, move 3PL companies, or dispose of unwanted goods.

The inability to generate sufficient business profits is another reason to close a company and shut down a warehouse. Business owners spend money on inventory, production overhead and general business expenses when operating a company. Spending too much money in an attempt to generate revenues can result in low profits because there is too much inventory on hand. Businesses may also be unable to improve their company’s operations by reducing inventory or repay external financing used to start the business. Rather than suffering through low and negative profits from liquidating merchandise, business owners may consider closing their company with the help of inventory liquidators. These liquidators are experts in disposing of dead stock and slow moving products.

Competition represents the number of companies in the economic market competing for consumers. Small businesses can face difficult competition when attempting to maintain sufficient market share. For closeout wholesalers business owners may close their business if competitors consistently produce more products at a cheaper consumer price. When businesses unload liquidation stock to overstock companies, there is increased competition for low priced goods. Warehouse liquidations, closeout websites, Amazon FBA sellers and wholesale liquidators all compete for market share Business owners unable to compete with larger competitors can suffer from decreases in sales. Large competitors can also offer new products that the small business is unable to compete with. This can force businesses to sell excess inventory and get rid of closeout products.

Companies need economic resources to produce consumer goods and services. Economic resources include inventory, labor and capital. Overstock companies benefit from businesses unable to keep enough resources to succeed. Labor represents the human resources available to convert raw materials into consumer products. Capital represents money, facilities and other physical assets needed to run a business. Business owners who cannot obtain sufficient quantity of an economic resource may close their company. It may be possible to sell excess inventory and overstock closeouts to help generate cash and make room in the warehouse, but this requires the help of a closeout liquidator and other excess inventory buyers.. Wholesale liquidation companies are the best resources for this because they specialize in liquidating inventory and buying surplus merchandise.

Merchandise USA is a wholesale liquidator that deals in liquidation goods and closeout merchandise. We liquidate overstock of toys, housewares, sporting goods, lawn and garden, and home accents, and we distribute our inventory into secondary discount markets around the globe.