Two new offerings take distressed goods online

Auctions have already proven their worth as a cost-effective way for retailers to liquidate surplus or end-of season merchandise. But that’s typically like-new merchandise. Will online auction-goers buy distressed merchandise if the price is right? Two new online offerings – one just launched and one scheduled to launch soon – aim to test that out for themselves.

Genco Distribution System, a long-time provider of reverse logistics services that already was moving returned and surplus goods for its retail clients in online and offline channels, last week launched Delivery Dog on eBay. The storefront offers consumer electronics goods that may be only semi-functional; they’re clearly identified as such and buyer’s are advised to bid accordingly – (by the way -- no returns here.) Meanwhile, online liquidator eValuville.com, which already handles the online clearance of like-new apparel for a number of major retailers, is preparing to launch a new offering, Returns for Less, on its own site and on eBay within the next few weeks. As with the consumer electronics products on Delivery Dog, eValueville’s Returns for Less will offer merchandise that can no longer be presented as like-new. It`s developed a quality rating system that identifies for shoppers the extent of damage on each item offered for bid or sale.

Genco and eValueville are betting that there’s an online consumer market out there for selected goods that might otherwise be sold at salvage rates to offline liquidators who then send the merchandise to flea markets or out of the country. And they’re betting that consumers will pay more for the goods than the cents-on-the-dollar rates paid by salvagers who buy by the truckload. It remains to be seen whether the auction dynamic will bring in more for the distressed goods as they can on newer goods; Genco senior vice president Pete Rector estimates that online auctions could recover for retailers on average three times what they would if they were sold as part of a truckload.