What is Liquidation?

by Craig Anthony

1 min read

Liquidation typically occurs when a business doesn’t have enough money to pay off its debts and needs to raise money by selling its assets, including equipment and inventory. This usually means that the business is closing down. Sometimes, businesses that aren’t going bankrupt also liquidate their products to reduce inventory (such as liquidating out-of-season items to make room for next season’s products).The most common way to liquidate inventory is to offer deep discounts to customers. In a warm winter, your customers aren’t going to buy winter clothes at regular prices. But if you offer them a good deal such as “buy one, get one free,” you may change their minds. Don’t forget to spread the word about the promotion on your business’ website and social media accounts.You can also liquidate your inventory online through online platforms such as eBay and Amazon. These digital marketplaces let you reach out to customers who aren’t in your local market. Spend some time researching the online market and take site fees into account before setting your price. An overpriced product is unlikely to sell, while an underpriced one may not cover all relevant fees.If you want to sell your surplus inventory quickly but don’t want to spend too much effort in the liquidation process, you can sell your products to a liquidation company and be done with them.Regardless of how you liquidate your inventory, keep in mind that your goal is to sell your products as quickly as possible so don’t expect to make a big profit from the process.

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