Dock lockout becomes a boon to online retail liquidators

Although the West Coast lockout of dockworkers was only 10 days old when interrupted by a court order on Tuesday, fulfillment experts say it could result in delays of up to 10 weeks in completing shipments. That’s causing a boon for off-price sellers and liquidators, who say they’ve been flooded with calls from retailers seeking to replace shipments held up by the lockout.

Many are turning to online liquidators in particular because of the speed that online systems offer. "When you have these kinds of interruptions you can find us easily," says Asad Haroon, vice president of marketing and business development of Liquidity Services Inc.’s Liquidation.com. "A new buyer can be registered to qualify and buy within a day. And more retailers are comfortable with buying online, especially in auctions."

"Our phone has been ringing off the hook," says Carl Rosendorf, CEO of SmartBargains Inc., which sells excess goods at marked-down prices at SmartBargains.com. "The dock strike has had a terrible impact on the economy and retailers, but circumstances like this create opportunities for the liquidation market." He adds that its recent surge in business is helping SmartBargains stay on a course to triple sales this year over last year.

Liquidation.com’s buyer base has surged in the past week, Haroon says. "We’ve had 200 to 250 new buyers every day," he says. In greatest demand are toys, video games, seasonal ornaments, consumer electronics and personal digital assistants, he says.

Retailers may be frantically trying to buy right now, but the lockout’s impact is likely also to cause them to be sellers later in the fall, experts say, because once shipments delayed by the lockout reach their destinations it will be too late for many retailers to sell the goods at retail prices.