Liquidating excess inventory

14-Sep-2017 20:24

Besides the fact that this is an unethical business practice, most states incorporate strict liquidation sale regulations into consumer protection laws.Check with your state attorney general for laws that pertain to your state of residence before scheduling or holding a liquidation sale.A business has several options from which to choose when it liquidates its inventory.It can use the distribution channels it has always used to sell its products, with prices slashed so low that customers can't resist them.The reason is that, in the absence of specific permission, liquidating inventory purchased on credit for which there’s an outstanding balance, business assets used as collateral for a business loan and any leased assets constitutes an act of fraud.In addition, take care to set fair prices when liquidating goods is part of an exit strategy, because even if you owb the goods and assets outright, other creditors also deserve and expect payment.In general, you can expect to get up to about 80 percent of an item’s original value using this liquidation method.

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Unless you have specific, written permission to sell, liquidate only goods and assets the business owns outright.They often avoid purchases of perishable or trendy goods that must be resold right away.They also stay away from products that are expensive to ship and to store.WInding down a business is a straightforward process.