Selling stock when closing down a business

Closing a business takes a lot of decisions, and the stock is one of the biggest. It's often the largest asset left, it's the hardest to turn into cash, and it has to be gone before the lease ends. We've been buying stock from owners in exactly this position for over 30 years. This page is for owners who are closing, retiring, selling the business without its stock, or winding down a product line, not for businesses in liquidation.

What are your options for selling stock when closing a business?

You can sell it to your own customers, sell it online, sell it to a stock buyer, or give some of it away. Most owners use a mix.

business.gov.au notes that you may need to sell excess stock at a discount, such as a closing down sale, and suggests researching selling prices and the platforms you can use.

How do you run a closing down sale well?

Tell customers early, through the shopfront, your website, social media and email. Price the popular lines to move first, and mark down in clear steps rather than all at once. Set a final date and stick to it.

The catch is what's left at the end. A closing down sale clears the stock people want. It rarely clears the back room, the slow sizes, the old season or the cartons in the storage unit. That leftover is where a stock buyer is most useful.

When does selling to a stock buyer make sense?

When you have more stock than you can sell to customers before the deadline, when it's mixed or untidy, or when you'd rather spend your last weeks on everything else that comes with closing. We buy the parcel ourselves and resell it to major retailers, discount chains, overseas buyers, charities, wholesalers and distributors. You deal with one buyer, we don't charge a broker fee, and in most cases we make one offer for all of it.

If you're winding down a product line rather than the whole business, the same applies, and you'll probably care where the stock ends up. Tell us, and we'll follow your guidelines on pricing and distribution locations.

How does it work?

1. Send us the details. A stock list spreadsheet (SKU, description, quantity, cost or RRP if you're happy to share, and best-before dates for anything dated), photos and the location.
2. We survey the market. John discreetly checks with buyers to find out what the stock is worth.
3. We make an offer. In most cases for the whole parcel. If buying it all isn't possible, John gives you his best advice on how to sell it.
4. We agree collection and payment. Collection is flexible and agreed per parcel: we can arrange it, or you can deliver. We pay promptly, as per our agreed terms.

We buy from anywhere in Australia, from New Zealand and internationally, and there's no minimum size.

What should you check with your accountant before you sell?

Talk to your accountant before you set prices or sign anything. A few things worth raising, in general terms:

• Stock valuation at closure. How your remaining stock is valued for your final tax return, and whether any of it should be written down. Our guide on writing off obsolete stock covers the general principles.
• GST. business.gov.au says you must cancel your GST registration within 21 days of stopping your business activities, that GST may apply when you close, that you may need to include GST in the price of business assets you sell, and that you may need to make GST adjustments on your final BAS, including for assets you keep. The business.gov.au closing guide links through to the relevant ATO information.
• Stock you keep or give away. Taking stock for personal use or donating it can have tax consequences. Ask before you do it.
• Timing. Whether selling before or after a particular date makes a difference for you.

This is general information, not tax advice. Your accountant knows your circumstances.

What is your remaining stock worth?

What a buyer will pay now, which depends on brand, condition, quantity, dates and where it can be sold. It's rarely what you paid. Our guide on how much your stock is worth explains what moves the price, and clearance vs liquidation compares the two ways of moving stock quickly.

Our four guarantees

1. "We strictly follow your guidelines in relation to pricing and distribution locations."
2. "We send payment promptly, as per our agreed terms."
3. "We place a priority focus on clearing your stock."
4. "We speedily and discreetly convert your stock into cash at the highest possible price, without damaging your market position."

Is your business insolvent?

If an administrator, liquidator or receiver has been appointed, the stock is theirs to sell, and you should follow their instructions. We work with insolvency practitioners too; see our page for administrators and liquidators.

Closing up shop, retiring or ending a line? Send us the details and we'll make it one less thing to worry about.