Challenge

A top-tier wholesale retailer with 400+ US locations was encountering interruptions and failures in its reverse supply chain. Contributing factors included sporadic pick-up of goods, undocumented shortages, payment issues, unpredictable freight costs, diminishing recovery, and item mismanagement. In addition, this inefficient solution weighed on the retail and operational teams, taking valuable time away from core business efforts.

Solution

Liquidity Services leveraged its regional network to customize a solution that allowed for parcel/LTL shipments to occur at the convenience of the retailer with an initial payment up front to enable ease of store operations. Liquidity Services picked up the freight costs and improved recovery utilizing three transparent online sales channels. An integrated revenue share structure ensured that the retailer received the maximum value for its goods, providing optimal recovery and giving the retailer information to help drive further improvements. This flexible solution allowed for service increases to handle spikes in inventory flow during the holiday season and inventory restock and also built compliance into the process.

Results

The Liquidity Services solution significantly improved overall service levels for the retailer and recovered a net rate of return of 37%. The retailer’s team also received praise from stores who commended the ease of use with the new system. The retailer utilized Liquidity Services’ detailed quarterly asset recovery reports to drive liquidation decisions, improve vendor quality, and track performance trends. Overall recovery value increased and the management team was able to make more informed decisions about inventory flows and pricing.

  • The Liquidity Services solution included data wiping, adding protection for the retailer.
  • Freight costs were reduced by more than $200,000 annually, and legacy shipping issues were eliminated.
  • Quarterly revenue sharing checks further increased the value to the client, whose previous program had resulted in an operating loss.
  • The data and transparency in store level recoveries provided unique new opportunities for the retail teams to drive further improvements, new vendor agreements, improved quality and customer service, and greater store level controls.

The surplus asset recovery solution netted a savings on freight costs and resulted in a 37% net rate of return to the retail client.