Generating revenue from excess stock - STRATEGIC FINANCE. Time to consider corporate trade.
The widespread snow and ice across Britain in the run up to
the festive period was not kind to brands and retailers, nor to
the nerves of many financial directors, during what for many
is their most important period for sales.December saw
consumers struggling to make it to the shops and retailers
failing to fulfil deliveries to their outlets and direct to
While conditions eased for the vital post-Christmas sales
period, no matter how good your planning is, the risk of
unforeseen circumstances affecting your sales is always a
real threat. As result, there’s no question that some of you
reading this will be left with excess stock at the end of the
sales season and scratching your head at the thought of how
to generate the best value from it and avoid creating a hole
in your balance sheet.
In fact the issue of excess stock caused by the festive
trading conditions is likely to be exacerbated by the end of
the calendar year and the approach of April, which spells the
end of the financial year for many businesses. This is
traditionally a period when brands and retailers find
themselves with excess stock or assets they need to dispose
Therefore, the big question is what’s the way forward to
maximise value from this unsold stock or unwanted assets?
A key option is to work with a corporate trade or barter
business. They will be able to minimise the loss of margin on
those goods that you would otherwise have had to take when
liquidating them. And by receiving three times more than the
liquidation value in trade credits for the product or asset you
are offloading, you will be able to spend these on generating
extra value from your media and marketing campaigns –
from advertising to print, to conference events and corporate
Despite corporate trade being a well established and growing
industry, too few financial professionals make the most of
the opportunity it presents to generate extra value from their
underperforming assets. As a result, businesses are often left
having to ‘cut their losses’ with their surplus stock,
exposing their organisations to financial loss as well as
aving to contend with what to actually do with the goods.
Critically, they are also missing out on generating the extra
value that corporate trading offers (through trade credits), in
terms of boosting media spend and supporting brands during
tough trading conditions.
But what should you bear in mind before partnering with
corporate trade business?
Big is best
Only deal with established corporate trade operators who
have financial stability to ensure they will be around in the
long term. For finance professionals, this longevity
guarantees that they can work with their marketing
team to spend their trade credits as part of a media
strategy without the worry that that the corporate
trade partner might not exist in the future, along
with their opportunity to spend credits.
If you are a business that operates worldwide you must
partner with a corporate trade company with similar reach.
This can help generate extra value for media spend within
the countries they operate in and adds an element of
flexibility to your media spend.
Big brand names
Ask the corporate trade company you approach who they
work with. If their client list does not include some blue-chip
brands, consider giving them a miss as they are unlikely to
have sufficient experience and reach that will deliver maximum
It’s vital that any business sells stock to approved resellers,
or else they risk serious damage to their brand. Ensure your
corporate trade partner has the contacts to do this.
In this day and age, technology has progressed sufficiently
for corporate trade organisations to offer 24/7 reporting on
how trade credits are being spent. This knowledge can be
used to easily tweak trade credit spend in real time to ensure
the brand constantly generates the best results from their
campaigns. Always ask what procedures are in place before
undertaking any appointment.
When looking to generate the best price and also extra value
from excess stock or an unwanted asset, use an established
corporate trade business. Because being an industry where
experience, size, volume of contacts and the provision of the
latest reporting technology is key to delivering value, it’s only
these businesses that can offer all this to ensure you
generate the greatest return from your unwanted assets.