How Independent Retailers Can Remain Competitive In A Returns-Happy Marketplace
By Ben Whitaker, Director EMEA, B-Stock Solutions.
There is a major shift happening in retail right now: department stores and high-profile retail chains that once seemed to be firm fixtures on our high streets are announcing massive store closures and bankruptcies, while billions of pounds in sales are moving from in store to online. While this has created issues for some, many others are migrating to new strategies in order to meet the needs of consumers; this includes establishing relaxed return policies to compete successfully against other retailers and implementing ongoing programs to effectively deal with those returns.
Relaxed return policies help to build customer loyalty, but also drive a culture of impulse buying as consumers can easily purchase and return items with minimal hassle. In ecommerce, returns are even more prolific as buyers are likely to purchase three or four sizes or styles of the same product and send back the ones that don’t fit or work.
This trend, and the growing cost associated with it, is having a major impact on retailers of all sizes; this is especially evident when it comes to merchandise that can’t be returned to store or virtual shelves and is slated for liquidation. For smaller, independent retailers with already skinny margins and limited resources, it’s essential that they understand the true value of the stock and reassess whatever programs they have in place for the handling and remarketing of it. Typical methods like selling the stock to a middleman or negotiating offline with a handful of buyers inevitably leaves money on the table. Liquidators aren’t forced to complete, and will negotiate prices down in order to maximize their own profits as a result. What’s more, any time spent negotiating deals for merchandise takes away from core, strategic business activities.
So how can an independent retailer quickly turn its returned and excess stock into the most amount of cash possible?
The most viable solution is to bypass layers of middlemen and sell directly to a strong base of business buyers, who then sell directly to consumers.
While returned and excess inventory may have little value to you, it’s likely there is already a robust secondary market and buyer base for your product(s). Leveraging a business-to-business online auction liquidation marketplace is one way to access this buyer base. The most valuable marketplaces come with an established and vetted base of thousands of active buyers who will compete for your stock via online auctions, pushing prices up rather than a handful of liquidators negotiating them down. This type of solution, when used properly, can boost recovery by 30-80%… and sometimes much more. Additionally, it will help deliver a faster sales cycle, quickly turning your returned and excess inventory into cash, whilst automating the process and generating proprietary market intelligence in the form of real data on market prices.
Once you’ve selected a B2B liquidation sales channel, there are a few things you can do to ensure you get the best value for the stock. For example, how you assemble your inventory and who you market it to can have a huge impact on price. It’s best to segment auction lots by product type, condition code, original MSRP per item, and location.
Finally, having a consistent supply of inventory will drive higher prices. Consistent auction listings will help you develop loyal followers and buyers, which positively affects recovery. Additionally, providing great customer service is key. In an auction environment happy, repeat bidders are significant and can boost prices by double digits.
With today’s return-happy shopping culture, it literally pays to rethink whatever program you have in place for the handling of this stock.
In the case of liquidation: every pound increase in recovery value, or reduction in expense, equals another pound of profit for the business.
Ben Whitaker is Director for the EMEA region at B-Stock Solutions, a technology-enabled company powering the largest network of private-label B2B liquidation marketplaces. Hundreds of retailers including some of the top global retailers, have leveraged B-Stock’s technology and service offerings to sell billions of dollars in consumer returned and excess inventory. For more information please visit http://bstock.com/