Edition 129, February 2024

Could You Be Building a More Comprehensive Recommerce Strategy?

By B-stock Editorial Team, B-Stock

Between high inflation rates, reactive consumers, seasonality, and a seemingly unending flow of customer returns, your organization may well be feeling the constant pressure of its own unsold inventory. The problem is an easy one to identify, but even leaders in the consumer goods space have struggled to move excess inventory out of their warehouses in a quick, cost-effective manner.

This is why every brand and retailer needs to develop a resilient, scalable multi-channel strategy for inventory reduction. While building such a program certainly isn’t a walk in the park, there are a number of different solutions and approaches that can help your organization begin to tackle the persistent challenge of excess and returned inventory.

But before diving into new solutions to explore, it’s helpful to recognize why letting go of the status quo is so important.

Pain Points of the Traditional Approach

You’ve probably realized by now that traditional liquidators like doing business their way. And while these wholesalers and brokers are plentiful and eager for your business, they’re a less-than-ideal solution for a few different reasons:

  • Lowball, Take-it-or-leave-it Offers
    Their offers may be just pennies per unit, and your own liquidation partner is often only the first in a chain of several middlemen, each waiting to take their cut of the value of your perfectly good unsold inventory.
  • A Single Point of Failure in Your Resale Operations
    If your preferred liquidator closes up shop or simply can’t take on certain goods for any reason, you’ll find yourself back at square one, shopping around for reliable, trustworthy partners who will pay fair rates.
  • Managing Multiple Relationships
    To combat the problem of a single point of failure, you can try to maintain multiple relationships. This is easier said than done, however—especially when so many rely on slow manual methods like phone, email, and spreadsheets instead of purpose-built platforms. The value that you recover may not justify the added time, work,
    and stress.
  • Poor Brand & Channel Control
    You need to be sure buyers won’t interfere with your primary sales channels or sell in ways and places that don’t fit your brand reputation. Traditional liquidators and brokers aren’t held to any standard when it comes to the resale of your excess goods and have little incentive to abide by your organization’s resale preferences.

Overall, it’s important to ask yourself one question: “What’s the cost of doing nothing?” Be it reshelving expenses, climbing warehouse rent, or simply the opportunity cost of holding slow-moving goods, the same old methods come at a price to your business.

Instead of simply selling piecemeal to traditional liquidators, there are several methods that brands and retailers should explore when building a program to deal with mounting surplus, including:

  • Classic auctions
  • Contract-based sales
  • Targeted, direct-to-buyer sales

Below, we’ll explore each of these models and explain a bit about how today’s best-in-class recommerce solutions can help you navigate each to maximize their benefit to your organization.

What to Look for in aB2B Recommerce Partner

Classic Auctions to Increase Recovery

For brands and retailers that grapple—often or occasionally—with large amounts of returned, obsolete, seasonal, or slow-moving inventory, the classic auction model is a great option.

Once you know what inventory you wish to clear out, you’ll generally submit a manifest to your service of choice. If you’re working with a fully managed solution, a responsive team of experts should handle the legwork of listing them on your custom branded storefront. Once your auction launches, B2B buyers around the globe can bid on your goods.

The benefits of a managed auction solution include:

  • Competition-driven Recovery
    When buyers compete in real time, they drive prices up and your business extracts the highest willingness to pay
  • High Sales Flexibility
    Access an on-demand sales channel to clear whatever inventory as you have—regardless of category, quantity, condition, or season
  • Your Choice in Buyers
    Open your storefront to thousands, or approve just a handful of vetted buyers— you can even invite your current liquidation partners to bid
  • Demand for Anything, Everywhere
    Access to a worldwide base of business buyers who are eager to take on your goods, no matter the category, quantity, or condition
  • Expert Listing Support
    Auction experts handle administrative tasks and help optimize your listings to maximize recovery while a marketing team generates buyer demand

Contract-Based Sales for Predictability at Scale

Businesses who regularly have considerable amounts of certain inventory that they wish to clear out on a recurring basis may well prefer contract-based sales.

This approach will usually involve reaching out to a representative with a description of your goods so that they can search a large buyer network for vetted, high-volume purchasers who are prepared to enter into a contractual commitment to accept truckloads of inventory on a recurring basis.

Ideally, your service will set up an auction between a few such buyers to ensure that the opportunity is awarded to the highest bidder, then draw up a contract between both parties. They should also be able to track all transactions, and assist with any disputes that may arise.

The benefits of this type of solution include:

  • Increased Velocity
    Unwanted inventory will be purchased and out of your warehouse fast—sometimes within 24-48 hours of creating the manifest
  • Guaranteed Pricing
    All pricing is negotiated up front so your recovery rate is secured for the duration of your contract
  • Continuous Demand
    Sales contracts should generally last half of a year or longer, so you’ll be confident knowing that your most common surplus is spoken for months in advance
  • Improved Forecasting & Resource Management
    There’s less risk of recurring, slow-moving inventory straining your carrying capacity so you can merchandise, plan and order more confidently
  • Streamlined Process
    Even a well designed spot auction process requires certain steps in order to sell, but with a contract in place, you won’t need to submit photos, optimize lotting, communicate with multiple bidders, plan logistics & shipping or collect payment

Direct Sales to Maximize Agility & Velocity
Perhaps your business is downsizing, consolidating operations, or moving offices. Perhaps a one-off event, market anomaly, or purchasing error has left you with goods that you don’t regularly offer.

If your business occasionally finds itself with these atypical or unexpected lots, consider a partner that offers direct sales as an additional as-needed service. This can include flash auctions and direct placement sales solutions to deliver maximum velocity when moving out difficult lots.

With flash auctions, you should be able to contact your dedicated representative with details on your special, atypical, or one-off lots. They’ll identify and approach a few relevant buyers to offer them a chance to participate in a short, highly exclusive, one-time-only auction.

Alternatively, with the direct placement model, your expert contact will go right to a single suitable buyer with a standing offer to take on a particular lot—no long-term contract or auction needed.

Here’s how a direct sales approach can benefit your business:

  • Quiet & Discreet Sales
    Goods sold via flash auction and direct sale won’t necessarily have to appear on your public storefront, so your regular buyers won’t see them
  • Access Beyond Your Regular Buyers
    Even if you don’t mind an open, publicly visible auction, you might not have relevant buyers’ attention for certain lots—but experts with access to a large buyer network will know exactly where to find them
  • Sales Done in Hours, Not Days
    When speed is your top priority, flash auctions will tap just a few relevant buyers for a one-time auction that creates a must-act-now scenario with a very narrow bidding window
  • Ultra-targeted Offers
    With direct placement, your contact will approach a specific, qualified buyer with a standing offer on a one-time lot which they may accept at their leisure

Sustainability Is Built In

Selling under any of the models discussed above reduces excess inventory by pushing it into a thriving circular economy, not only strengthening your bottom line, but tackling sustainability and environmental initiatives as well.

A B2B marketplace solution represents the best and easiest way to ease the pressure on overstocked warehouses and ensure that surplus products go back into the hands of consumers rather than into a landfill. Companies that embrace this ethos will, of course, be rewarded not only in terms of improved financial health and streamlined operations, but also with the loyalty of consumers who appreciate brands and businesses that act sustainably.

Buyers Will Thank You Too

High-volume buyers are searching for predictability. With buying contracts in place, they’ll have the inventory consistency they’re looking for and can plan their own sales and marketing activities accordingly while also coordinating resources like manpower and warehouse space in a timely manner. Time once spent looking for new inventory can be reallocated to managing other aspects of their business.

With multiple stress-inducing variables eliminated, disputes will naturally be less common. Over time, your reputation as a seller will grow as your buyers come to view you as a reliable, cooperative partner.

Finding Your All-in-One Recommerce Solution

While traditional liquidators and various modern offerings may still have a place in your business’ recommerce strategy, retail leaders around the world are finding that a purpose-built, all-in-one platform is ideal for unlocking the true value of their surplus inventory. Now, if you’re thinking that all of this is a lot to ask for in one single solution, you’d be right. Fortunately, B-Stock is up to the task.

As one of the first companies to recognize the value of an online B2B recommerce solution in the secondary market, B-Stock has spent the last two decades advising major brands and retailers on how to optimize their resale operations for maximum value. Now, we’re excited to offer our own proven versions of each of the solutions discussed in this article in one flexible, modular suite of tools.

Between our flagship Spot Sales solution, the all-new Contract Sales, and other Direct Sales services, B-Stock can help you devise a suitable, long-term strategy for your excess, returned and slow moving stock, regardless of the category, quantity, condition, or location.

Interested in learning more about B-Stock solutions? Contact us today

B-stock Editorial Team
B-Stock is the world’s largest B2B recommerce marketplace. Billions in returned and overstock inventory are resold through B-Stock each year as a result of unparalleled buyer demand, streamlined operational processes, and extensive expertise and insights. Industry leading brands and retailers trust B-Stock with their recommerce operations because we deliver superior financial results and significant improvements in velocity and efficiency, all while furthering global sustainability efforts.