| If you are looking to effectively liquidate your excess | | | | brand name. With normal sales channels, you have an |
| inventory, it is essential that you understand your sales | | | | idea how your brand image is being held up. But by |
| channels. And you have to know the cycle that your | | | | employing an auction to dispose of your excess |
| goods move through from your business to the end | | | | inventory you forfeit that luxury. |
| user. If you have excess inventory that your normal | | | | If there is a problem with your product, which may |
| sales channels were not able to dissolve, you may | | | | very well be the case with excess inventory, and a |
| consider a liquidation auction to purge this inventory. | | | | customer is unhappy, this could also tarnish your brand |
| Using an auction can have its benefits but can also | | | | because you would not be able to exchange or refund |
| have severe drawbacks. | | | | the purchase. Being able to maintain customer relations |
| When using liquidation auctions, do you know what | | | | is another potential risk that you take when liquidating |
| channels the buyers are going to be using? Do you | | | | your inventory in a liquidation auction. |
| know what markets they are operating in? That is | | | | Other customer service issues include the risk of |
| going to be the most critical question you can ask | | | | fraudulent customer returns. If you operate in |
| yourself because it can affect your business in many | | | | neighboring markets, you want to ensure that your |
| different ways. The potential buyer could be using | | | | liquidated items are not returned to your stores for a |
| similar channels that you do or operate in neighboring | | | | full refund. This is especially vital if you have |
| markets, which could turn your liquidated products into | | | | private-label goods that are exclusive to your |
| primary competition against your own goods. This | | | | company. This can end up costing your business |
| could end up hurting your sales because you would | | | | exponentially. |
| have to lower the price on your current goods just to | | | | Of course if you are closing down your business or |
| compete, and quite possibly compromise the integrity | | | | have filed for bankruptcy, these issues would not be |
| of your brand and image in the process. | | | | as relevant, unless you have products that are still |
| If you have to lower your own prices, this ends up | | | | circulating in the market with other vendors, but overall |
| hurting your margins and ultimately your bottom line. It | | | | the risks involved with liquidation auctions are still a |
| can also hurt your brand image. If your products are | | | | very real threat. |
| commonly being sold at a discount, consumers may | | | | If you're looking to liquidate your excess inventory, |
| lose faith in your brand and the value your products | | | | consider your options, think it through, and do your |
| offer. Another real concern with liquidation auctions is | | | | homework. Using a liquidation auction may not be the |
| that you cannot work as effectively to protect your | | | | best fit for your situation. |