How to Sell Your Inventory When You Are Closing
When you’re faced with closing your doors, selling your inventory effectively can mean the difference between paying off your debts and filing for bankruptcy. With enough money from an inventory liquidation, you might have enough to regroup and start another venture. Understanding your options for closing out your inventory will help you make the best decisions for your situation.
If you are ready to walk away from your business with a loss, you have more options for liquidating your inventory than if you need to maximize your revenues. Decide if you want a quick exit or maximum value for your inventory. Set a deadline for your liquidation and more than one amount you’ll accept for your inventory based on different sale dates. For example, early on, you might want to try an in-store sale to maximize income, while at your deadline date, you might donate leftover inventory to a charity to take a write-off and lower your tax burden. Discuss your options with an attorney if you believe you might have to declare bankruptcy. Debtors might challenge your sales if they appear too discounted.
Determine what your inventory is worth retail, wholesale and as a donation write-off. Calculate the costs to sell it retail and determine what your net return will be on each of these three liquidation methods. Set retail prices for the first week of a sale, then lower prices for the final week after your initial rush of bargain hunters has made their first pass. Set your starting bargaining price for selling your inventory in bulk and your bottom-line price for lots before it’s worth more to donate it.
Consumers are familiar with going-out-of-business sales, and you might be able to liquidate most of your inventory that way. Bundle items you think will be able to sell at any price with your more attractive items to encourage more sales. You might offer an extremely low price on a slow mover if a customer buys a more-attractive product, or give items away with middle-of-the-road items to increase the chances you’ll move them both.
If you’re looking to move your inventory without selling it piecemeal, contact your competitors to gauge their interest. In addition to direct competitors, contact resale and thrift shops that don’t often get the opportunity to buy new items. Set a price for your entire stock, which they might not want, then entertain bids for what they want. By the time they cherry pick, you might not have enough left for a sale. However, a donation might close the gap and make it worthwhile. If you feel you can move the inventory piecemeal with a more drawn-out sale, set a firm price for the entire lot -- your competitor can still make a profit from the item he wants to sell, discounting or donating the rest.
Ask your vendors if they would like to buy their products back. Depending on what the inventory is and what condition it’s in, your vendors might be able to resell it to other customers. Be prepared to take a more significant hit than if you try to sell it retail or to bulk buyers. Your suppliers won’t offer you what you paid for it, however, because it’s cheaper for them to sell their own inventory.
If you can’t move your items fast locally, offer them for sale online. Flea market vendors, nonprofits, thrift stores, liquidators and other bulk sellers scour the Internet for deals and might drive to your location and truck your items off for individual resale. Be prepared to break your inventory or ship it, calculating shipping prices before you agree to any sale that requires you to send your inventory to a buyer.