March 27, 2002, 12:00 AM

The auction trade-off: Higher recovery or fast sale?

Manufacturers and retailers with excess inventory can recover 25% to 40% more of a product’s value by going to auction rather than by selling to a bulk liquidator. But the catch: Auctions can take months longer.

Manufacturers and retailers with excess inventory are finding they can recover 25% to 40% more of a product’s value by going to auction rather than by selling to a bulk liquidator, Joel Holtzman, president and CEO of Excess Technologies LLC, tells Internet Retailer. But there’s a catch: Disposition takes longer, sometimes months longer.

“Many times the decision about where to sell comes down to how quickly they need to recover their money,” Holtzman says. “If it’s the end of the quarter and they want to get the merchandise off their books, they’ll want to liquidate. But if their objective is to get as much money as possible, they’ll go to auction.”

Other factors that a seller might take into consideration are whether the warehouse space exists to store all the product while it sells at auction and whether the seller wants to devote employee time to overseeing product disposition, Holtzman says. Furthermore, he says, going to auction allows the seller to maintain more control over the brand and product presentation than if the products go to a liquidator.

Excess Technologies offers both bulk liquidation and auction management services. Its auction management services include not only running the auction, but also paying the fees for listing and the credit card fees, picking, packing and shipping the product and dealing with customer service, Holtzman says.

 

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