So you finally decide to liquidate your inventory of 30 pallets of Nerd Flakes. By now, there is four months left on code and you decide that you’d like to closeout these items and see the inventory go to a deep discount retailer. How are you going to get the best price? You immediately start calling every broker or deep discount buyer to see what the market will bear.
What you don’t know is that right after your call, most of these companies will jump on the phone and try to sell your product to as many discount retailers as possible before they even buy it. The idea is the same: create competition for the product, get the highest price and everyone’s happy.
Except the opposite happens.
Now image you are a buyer at a discount retailer. On Monday morning you get an email with an offer for Nerd Flakes at a decent price. It sounds like the type of product that is a good fit for your store. But as you are evaluating whether you could actually buy it all, you get a call from someone else selling the same Nerd Flakes.
Whoa. What goes through the buyer’s head: “everyone is unloading Nerd Flakes and my competition is going to be loading up as well – maybe even at a lower price and that’ll make me look bad.” So one of two things happens:
(1) They say no. The last thing a discount retailer wants is to be offering the same product as a competitor at a higher price. It’s better to be safe than look like you don’t know how to do your job, or:
(2) They make an extremely low counteroffer. If they buy it at a ridiculously low price then there’s little risk of being underpriced by competitors.
In either case, you lose – even though what you did seemed to make a lot of sense.
Whoever you work with, we recommend working with one company to help you with your inventory issue. Give them a few days to succeed before moving on.
Otherwise, things might just backfire.