![]() For example, they generally have ready cash and warehousing space available to offer a quick and efficient turn-around. Such stock clearance companies dispose of surplus stock discreetly through a network of exporters, wholesalers, flea market sellers and small retailers. There can many benefits of using a stock clearance company to dispose of stock in this way. Companies avoid such channel conflicts by removing branding, selling anonymously through stock clearance companies and/or selling in other countries outside of their target markets. For example, if a big brand offers last year's model of shoe at a heavily discounted price right next to this year's model, it could harm sales of the current model. Bloated working capital and high interest costĪt the same time, companies need to minimize cannibalization of their flagship products.Sending the wrong signals to your team (it is OK to be sloppy and inefficient).Depressing feeling every time you visit the warehouse or check the balance sheet.High tax payments due to inability to book losses on depreciated assets.Reduced sales due to blocked cash flow of your customer.Reduced sales due to blocked retail shelf space.Other times, companies are motivated by the need to make way for newer models or to end technical support of old legacy products.Įxcess or obsolete stock can cause a wide variety of issues such as: It can be a costly problem due to the space occupied, capital tied up and oversight/upkeep required. Most companies suffer from excess stock from time to time. ![]()
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