The Little-Known Risks of Liquidation Auctions

You can be able to reduce your surplus inventory through liquidation auctions among other popular methods.  Getting rid of your excess inventory, through liquidation auctions can have its drawbacks and benefits.  When you opt for an online auction, the view is that goods move relatively quickly. However, this is not a guarantee, and it can take some time for your inventory to turn over.

In the meantime, your capital is stuck on assets that are not moving. This can harm your business as you don’t have the resources to take advantage of opportunities until the inventory sells. Keeping pace in liquidation auctions can be particularly time-consuming.

Liquidation auctions also make you lose control of the sales channel and brand control. The bidder on your inventory can be a potential competition; this, therefore, hurts your sales, jeopardizing your brand’s integrity. Liquidation auctions offer little control on your inventory; it’s consequently essential to be aware of the influence on sales channel and brand image.

Utilization of liquidation auctions

Auctions can tend to cost a bit higher due to the effect of intermediaries. You, therefore, have to pay a certain percentage to the auction house, the auctioneer or any other expenses. If using liquidation auctions raises questions in your mind, then you can opt for a liquidation company. A liquidation company is different from liquidation auctions.

Liquidation company

A liquidation company pays cash up front; therefore, you won’t need to worry how long it will take to sell inventory. You also get access to an added insurance of your inventory selling off to protected channels, hence, not putting your brand or pricing at risk. You are also in a position of dealing directly with a particular company, to cut out the cost of middlemen. Working with a trusted liquidation company solves a lot of risks encountered in liquidation auctions.