There are a lot of scenarios where businesses have excess of products in their inventories. This can be due to bankruptcy, poor response of the market, manufacturing defects and troubles in distribution or export. In these cases, the manufacturing firm can face a lot of financial losses and all those products in their inventory will not get them any returns. Companies nowadays sell bulk stock returns to inventory liquidators that buy from them at low costs and sell it further in the market.
These companies provide a lot of benefits for manufacturers and the following are a few out of the many benefits.
1)Returns on failed investments: When companies produce a certain product, they invest a lot of money into its production, marketing and distribution. If the products fail and end up being in inventory, the company faces heavy amount of loss. Inventory liquidators buy these products from such manufacturers and then sell it to market after processing or changing it. In some cases they even scrap these products and sell the useful items for a good amount.The manufacturer gets a certain amount against their investments by selling it to liquidators and can avoid heavy loss to their company.
2)Managing surplus: Often companies produce more products than the demand and it results in surplus inventory. As there is no demand for the products, they will end up occupying space in their inventory while not providing any benefits. In such cases, companies can sell it to liquidation services for small amount of money to avoid losses.