Liquidation stock: Why we buy company liquidation overstocks
Author: John Coorey
Many companies ask us to buy their liquidation stock and overstocks just before they are about to enter into a company liquidation. A lot of stock buyers are extremely cautious before purchasing any liquidation stock, and for good reasons too. When you buy liquidation stock, you are taking many huge risks! Here are some of the common risks that occur with liquidated stock, and how to mitigate those risks.
The liquidation stock might be faulty
You might purchase liquidated stock from a company about to go into company liquidation, the surplus stock might be faulty and guess what, you are now stuck with this obsolete inventory. So how do you mitigate against this particular risk?
The answer is simple. Use extreme caution. If it is possible, personally inspect the obsolete inventory to make sure it meets your stringent quality specifications. If it’s not possible to inspect the stock, you should ask for a significant discount to reduce your risk of making a bad decision. If you only pay an extremely low price for the liquidation stock and it turns out to not be at the high quality level you expected, you might be able to find stock buyers at low prices who will take the surplus stock, warts and all.
The business won’t support you after a company liquidation
Yes it’s true. Once the business goes into company liquidation, you can almost be certain that they won’t be there to support you and hold your hand if anything goes wrong with the stock. That means you also need to have a great deal of caution to ensure that the products you are buying do not need any after sales support. Otherwise you won’t be able to support your customers if they have any post-purchase problems with the liquidation stock.
If you want to buy or sell liquidation stock, get in contact
We have had over 20 years of buying and selling liquidation stock from our Sydney office. If you have any liquidation stock or company liquidation enquiries, please let us know and we will help you the best way possible.