How is the problem of excess inventory being solved today?
During our interaction with manufacturing companies in Pune, we haven’t come across any company which has been able to escape the problem of excess inventory. Excess inventory is often a threat to bottom lines of the companies and it is important to liquidate the same in time. There are various organized and unorganized methods that companies use to liquidate such inventory and the same are listed below. 1. Agents There are various specialist agents or mediators who help in liquidating excess inventory. These individuals usually have large network and help connect a buyer and seller. However it is a challenging task to identify such credible agents. These people are not based out of any one organization, listed on a website or easy to find. Moreover there are no common parameters of their commission charges, methodology of liquidation etc. Agents are a highly unorganized way to liquidate the excess inventory and one has be lucky to identify a right person for such liquidation task. 2. Scrap Vendors Scrap vendors are another common option that companies use to liquidate their excess inventory. They usually purchase such inventory on the basis of its weight, they further segregate it and the ones which are saleable are sold in local markets. The items which are not saleable directly in market are melted which is used to create new products. Scrap vendors offer an extremely low value for products they purchase. Also due to their unorganized nature, scrap dealing usually involves unscrupulous methods. This option of liquidation should be ideally considered when the inventory items are either used or are very old. 3. Word of mouth Many companies rely on this method of liquidation as it doesn’t require any external intervention. Companies try to spread a word in their network using mediums like emails, messages etc. and connecting with buyers to liquidate such inventory. The biggest drawback for this method is that, it has limited reach to the extent of network that one has and it is also a time consuming process. In case the number of items to be liquidated are high then the communication channels also have their limitations to reach out to many people. 4. Newspaper advertisements This is an organized way to liquidate excess inventory. One can regularly find classified advertisements in business newspapers regarding such inventory. This medium helps in reaching to a large number of audience. However, it has a very limited shelf life. A newspaper advertisement has a validity of 24 hours only and it becomes stale the very next day. Such advertisements are also an expensive option. A regular classified advertisement can cost Rs. 3000/- onwards. 5. Auctioneers Auctioning is a method frequently used by banks, companies that are closing down and other institutions for liquidating their inventory. This is a sophisticated method but it requires a large volume and value of inventory for liquidation. This option becomes economically unviable if the quantum and value of inventory is low, as the auctioneers usually charge a heavy fees to conduct this process. A new method can be added to the above list, which are various websites where excess inventory can be listed and sold. However, most of them are either in B2C space or take no efforts in liquidating the inventory and are merely listing platforms. For a company which is carrying excess inventory, liquidation of such inventory is important. It is this opportunity that Tradexs identified and decided to pursue. Tradexs offers a solution which addresses all the drawbacks of the above mentioned avenues and helps a company to liquidate their excess inventory profitably, methodically and transparently.