Maximising the recovery value of surplus stock

Posted by Cameron Swan, published by Retail World magazine Corporate Trade
15 5 2017

End of financial year is fast approaching and excess stock is an issue for all retailers who are similarly looking to reduce their overheads, free up storage and remarket or liquidate surplus inventory in efforts to optimise their financials. It is critical to success of this process that retailers understand the true value of excess merchandise and implement an effective process to maximise recovery value while too, kick starting their next sales cycle.

Sale racks or seasonal sales are the most common ‘line of defence’ for retailers as they begin to rid themselves of excess stock that will only burden their final year’s bottom line But retail CFOs need to devote their attention and resource to a reverse logistics strategy that sees them extract as much value as possible from returned goods via secondary liquidation, but too, one that feeds smoothly into the next sales cycle. 

Global vendors, Active International offer a way to transform excess stock into sales opportunities across the 17 countries they operate in -including China and South-East Asian markets- without encountering the brand damage that can be caused by disjointed secondary market supply. Local and global distribution for inventory (excess, surplus or discontinued) is a powerful benefit to clients exploring ways to liquidate and create value for their brand.

The solution offers an accelerated cash return for retailers who are looking to improve the sell-through of any inventory while reducing the operational costs associated with managing clearance programs “Active International allows businesses to access a global remarketing marketplace, a B2B advantage and a B2C market approach that will improve the efficiencies in clearing surplus stock and inventory while having a  positive impact to the business,” Cameron Swan, Australian Managing Director of Active International explains, “offering retailers an opportunity to build a new sales cycle that responds to their current seasonal demands while addressing their excess inventory challenges”. 

Take these examples, last year a UK based fashion manufacturer converted first line watch inventory occupying their facilities into advertising budget to allow the purchase of business sponsorship. Or similarly in Canada, an electronics manufacturer who was experiencing higher than normal levels of excess stock sought to trade the surplus to make room for new items involved in a product launch. The Active International sale turned the old inventory into advertising, which was used for above-the-line promotions to drive sales to the new product. 

“Offering more than a solution that will remarket excess inventory without devaluing your business, Active International offers the opportunity to turn surplus stock into a feasible growth strategy for the business,” comments Swan. “The big focus is on reaping the most value from every return to maximise the balance sheet recovery, all while protecting your brand reputation.”

Brands that are selling their inventory to a fragmented pool of secondary market vendors have little control over the price or terms that their products are on-sold, which can have an impact on the brand and its position in a consolidated market. While with 33 years’ experience (23 years in Australia) Active International boast an extensive knowledge of the secondary market, take a data-driven and transparent approach to extracting the highest value for their clients. From giant FMCG retailers and pharmaceuticals, to gift cards and apparel, Active International boasts a diverse global client base and offers a transparent and streamlined approach to secondary sales that sees a brand hold value through the liquidation process. 

Seeing high levels of returned and excess stock are characteristic of the current retail climate, it is critical to the bottom line that retailers understand the true value of this merchandise and implement an effective process to maximise recovery.

“Active is able to offer a “turnkey” strategy that allows retailers to remarket surplus inventory with immediacy, elevate storage overheads, and to kick start their next sales cycle through advertising.  We ensure that every dollar received in recovery is positively geared to contribute to the next sales cycle, Swan added.

 

Photo of Cameron Swan

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If you'd like to find out more about Corporate Trade and explore our business models, get in touch with Cameron Swan, our Managing Director by email or phone.

+61 2 9466 9116