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May 11

Distressed Inventory Helps Drive E-commerce Growth, Finding New Online Channels And Business Models

With the continued innovation and expansion of online sales channels, more companies saddled with excess or closeout inventory are discovering innovative ways to sell their inventory. Not only do these non-traditional sales channels provide a quick return for vendors, these channels also help keep off-price discounted sales under the radar screen from their primary or traditional channels.
The more obvious online sales channels for unloading distressed inventory in the past have been companies like Overstock.com, Surplus.net, or even Ebay. In the past 12-18 months however, some newcomers have come to the liquidation market with innovative models for unloading inventory. One such model is the deal-of-the-day concept, pioneered by a little know company called Woot.com. The deal-of-the-day concept offers one product at a great price for only 24 hours. The item will never be sold again as the deal-of-the-day, whether it sells out or not, so the Woot community, consisting of 2 million registered members keeps a close eye on these daily deals. There are over 100 companies now that are emulating this unique model, and Woot was recently acquired by Amazon.com. Another unique model is the daily promotional announcement, such as Groupon, but with many newcomers focused on distressed inventory as well. This model is more tailored and localized than the Woot model, and utilizes opt-in email blast linked back to a web site with several product offerings, which have proven to be very successful in sales growth. Yet another unique model that is gaining popularity is the online business auction where a large distressed inventory lot is open for bid as an absolute auction, which means no reserve price is required for a sale. Web sites such as Salvagesale and Liquidation.com cater to these types of large lot sales within a business to business environment. This model caters to resellers that would purchase bulk inventory and then resell the goods to consumers on Amazon.com’s Marketplace, Ebay, or even at Flea Markets.
To avoid having their business cannibalized, many traditional brick & mortar players such as Big Lots and others are moving online with business to business bulk wholesale fixed price listings and auctions as well, which is a major transition considering Big Lots started by selling exclusively to the consumer. Even freight broker companies like CH Robinson, a large publicly traded logistics broker, are getting into the online auction game by liquidating>liquidators, distributors, and even service providers like freight brokers, to quietly and efficiently move distressed inventory.

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