Gravenhurst, ON (PRWEB) June 7, 2010
There are many reasons why companies should be dealing with their excess inventory but let’s discuss the top two. The first is cash flow. It is commonly stated that cash is king. If a company’s cash is tied up in inventory it will cause undue stress on its operations and it could also cause a company to miss out on a possible strategic investment which could affect its growth or even its survival. The second reason is satisfying a company’s financial partners. A company’s financial partner’s expectations are that the company is dealing with their investment wisely to ensure growth. If a company’s sales have dropped yet their inventory dollar amount remains the same their inventory turns will be less frequent. This is a sign that your aged inventory is increasing and if it is an asset supporting a line of credit your line of credit may be reduced.
The winners in the new business climate are going to be the ones that can deal with the top two effectively.
Some companies do select to hold onto it hoping for a better day, companies in this position should take an honest look at their strategy. If their inventory turns are getting lower they should act before their financial partners ask them too.
Several companies will chose to scrap out their excess impacting their bottom line, they can sugar coat this by reversing provisions but anything you purchase for one price and sell for less is a loss no matter how you look at it.
Other companies chose to hire a liquidator and the liquidator will get what he can for it. Liquidators need to make their share so this will reduce a company’s margin but they normally will do better than scrap value. Liquidators also like volume so companies need to keep this in mind as the process works well for company closings or consolidations, not inventory reductions.
Due to the limited options above Manufacturing Systems and Solutions, a company that specializes in continuous improvement and cost reductions has created a platform on the internet where members can list their Excess Inventory. It can be found at http://www.inventory-excess.com. Once you become a member you can list as much as you please for one low price for one year. They have a wide range of categories and sub categories and are willing to add to these categories if the current ones do not match a company’s needs or they have unique items. The added benefit is you can buy as well so there is an opportunity for a company to increase their margins by purchasing below their standard cost. Another benefit at inventory –excess is that once you become a member your personal home page is created that appears when you sign in. On this page you can create, edit and manage your own listings. If a company is truly interested in reducing their costs this link should be on every buyer’s desk top.
In our new business climate we need to manage our assets carefully to remain competitive and ensure our cash is flowing. Inventory Excess is a great tool to help companies obtain their objectives.
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