Liquidating business inventory
Generally the trustee appointed will either arrange to auction off the inventory assets of clients, put out a tender, or offer to purchase the inventory, which usually goes to the highest bidder on a cash basis.
Reselling the inventory can be accomplished in a few ways including selling the inventory to retailers on a wholesale basis or selling the inventory in smaller quantities to other inventory liquidators.
Biz Buy data shows that the median time to sell a business dropped 23 percent from its peak of 200 days in Q2 2012 to just 153 days in Q4 2014--the lowest sale time since Biz Buy Sell began tracking this data in 2007.
But even five months can be too long for owners dealing with a change in personal circumstances, a sudden turn of events in the marketplace or a new business opportunity that requires immediate action.
Later this can often be resold for as much as five times the purchase price on a wholesale basis, and as much as ten times on a direct-to-consumers retail basis.
A good starting point for purchasing bargain inventory (at least until the business builds a reputation and contact base as a liquidator) is to establish alliances with trustees that deal in commercial bankruptcies.
Although outreach to potential buyers can reduce the sale time, it also creates risks--especially if it lets competitors gain inside knowledge about your sale.Even in the best of economies, small business owners are sometimes forced to exit their companies quickly.If this happens, it's critical to know how to achieve your goals in a fast sale scenario.On a direct-to-consumer retailing basis, the inventory can be sold through a company-owned liquidation store or stores, or monthly inventory liquidation sales can be advertised and held over a few days in short-term rental premises.However, there is a down side to this business, which is purchasing inventory that is difficult to sell regardless of price.