A Better Future for Surplus

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News & Expert Commentary on Surplus Management

Selling Surplus: B2C or B2B?

Liquidity Services- January 05, 2015

Whether you are a retailer or manufacturer, all businesses must efficiently manage their assets, products, and equipment in order to reduce capital expenses and improve the bottom line. The reverse supply chain holds great importance across industries, leading many organizations to form partnerships with a trusted asset management company. By integrating an experienced partner, the entire process of managing capital assets is simplified and streamlined. The necessary tools - such as software-as-a-service asset management solutions, along with a team of trusted professionals - better enable organizations to turn surplus into revenue.

Trusted asset management partners also grant businesses a platform to sell unused and idle assets. While surplus items can be disposed of in a number of ways, selling them via online marketplaces to maximize return on investment is often the best option, for it creates an ideal way to improve budgets and gain other strategic benefits – such as improving sustainability. When choosing a trusted partner, one big decision must be made: should you sell to consumers or to other companies? There are benefits to either choice.

Price Points
The first consideration to make when deciding to whether to sell your surplus B2C or B2B is the price point of items or assets. Often, organizations need maximum recovery on high value assets, while product manufacturers might want to dispose of a large number of refurbished items.

When selling straight to a consumer, a business will most likely be selling a single item or product on an online marketplace, such as Secondipity.com. That item will have a higher price point relative to a group of products, but still be competitively priced, which ensures that the merchandise is sold for maximum recovery. The process of selling overstock might be slower in B2C transactions, as individuals will seek out items and compare prices. With this in mind, slightly lowering a price on a B2C marketplace could make sales move more quickly.

B2B transactions, on sites such as Liquidation.com, are slightly different. A company will review the site to buy products in bulk and then resell the merchandise themselves. This means that B2B transactions have relatively low price points, but only because each separate item is being sold for less than the suggested retail price. While the recovery rate might not be as high as B2C sales, more inventory can be moved quickly, freeing up warehouse space and rapidly delivering cash. Also, because these are often one-off transactions, pricing can vary by business customer when selling directly to another company, as reported by the Small Business Chronicle.

Of course, B2B transactions can also be single products; an example is when asset management partners sell one large piece of machinery, and in that case, the process will be more akin to B2C in regard to revenue recovery.

http://pictures.brafton.com/x_0_0_0_14106778_800.jpgWorking with an asset management partner makes the choice of B2C or B2B as easy as pressing a button!

Sales Cycles
When selling surplus assets, organizations need to determine the level of urgency, as this will drive the B2C-B2B decision-making process. Looking at Secondipity.com, a B2C marketplace owned by Liquidity Services, companies will notice that items are sold at a set price. This means that items can be sold at a quicker rate, as the auction timer does not need to countdown. So, if time to revenue recovery is an important factor, B2C would be the ideal choice, but speed is not a guarantee.

In regard to B2B organizations will sell their assets in an auction via an online marketplace such as Liquidation.com. With a set time for when a product or equipment will sell, businesses can plan budgets and financial strategies around that date. B2B auctions give an organization reassurance when selling surplus that the item will be sold in an exact time frame and move larger quantities of various products.

Emotional vs. Rational
When a consumer wants to purchase products online, the experience is often an emotional one. The customer will feel empowered by their ability to purchase an item at a lower price than suggested in-store. When an organization is selling their surplus merchandise or equipment, this is important to consider. B2C sales are impacted by almost every sense, and there is always a chance of a customer purchasing a product on an impulse.

B2B transactions are very different. Instead of being influenced by lower prices and the thrill of purchasing, businesses tend to buy items and equipment after long discussions and extensive research. Products and machinery are bought with the bottom line and the necessity of the asset/inventory in mind. Impulse purchases are replaced by strategic planning, oftentimes with the help of more than one professional (many B2B buyers are also small or mid-sized business owners). Organizations need to keep this mind when considering B2B transactions as products are tied directly to necessity and low price points might not be the sole determining factor.

There are many different ways to sell surplus products and equipment. Working with an asset management partner can simplify the process, and help an organization make smarter decisions when selling items in B2C or B2B transactions.

Liquidity Services

Liquidity Services (NASDAQ: LQDT) employs innovative e-commerce marketplace solutions to manage, value, and sell inventory and equipment for business and government clients. We operate a network of leading e-commerce marketplaces that enable buyers and sellers to transact in an efficient, automated environment offering over 500 product categories. Our superior service, unmatched scale, and ability to deliver results enable us to forge trusted, long-term relationships with over 10,000 clients worldwide. With nearly $7 billion in completed transactions, and 3 million buyers in almost 200 countries and territories, we are the proven leader in delivering smart commerce solutions. Visit us at LiquidityServices.com.