Todays post if from Ron Southard, CEO at SafeSourcing Inc.
Shrink never goes down. Read all of the trade rags and the numbers stay pretty constant even with the newest technologies and services offerings. And, turnover is as high as ever so unless you have great awareness campaigns in place problem will just recycle itself.
If you want to have a huge impact and have it immediately, clean out those back rooms and move your overstock items using a forward auction. We all know that with all of the new products, store resets, aged inventory and poor sell through that most backrooms are full of items you did not receive money for. That is also shrink!
The first benefit if this strategy is it will force you to look for it. The second benefit once you find it is that it will reduce your inventory shrink.
Why is it that we never hear of retailers running forward auctions? There are dozens of sources waiting to buy your overstock which all retailers know will reduce shrink and improve bottom line profitability.
If you go to any internet search engine and type in the term overstock, the data returned is in the millions of pages. Many of these links are locations for Business to Business (B2B) and Business to Consumer (B2C) companies that will gladly agree to participate in e-negotiation events in the form of a forward auction to purchase your overstock or liquidated products for resale through their on line offerings.
Online forward auctions are an ideal way to get the best price for capital equipment, materials, overstock and services you may want to sell, such as when you need to liquidate excess inventory.
There are two basic types of forward auctions. The first is a liquidation auction where sellers are reducing inventory from overstock or liquidation and buyers are seeking to obtain the lowest price for items they have an interest in for resale and other purposes. The second type is more of a marketing auction where sellers are trying to sell unique items and buyers wish to obtain unique items. This is typical of an eBay type of offering.
Much of retail shrink happens in the back room or receiving area of retail stores. It just so happens that this is also the location of much of the overstock in the retail community. Much of this product sits there month after month resulting in significant margin hits to quarterly and annual earnings and as such to a company’s stock price.
Contact a SafeSourcing customer services representative to see how we can help reduce your overstock and shrink with forward auction tools.
We look forward to and appreciate your comments.