Industrial Liquidators Guide

What Is Liquidation?

Liquidation is the process of converting business assets into cash. There are many reasons for doing so. Businesses have any number of reasons for needing to raise cash, such as:

  • Paying off debts
  • Closing the business
  • Expanding in their current location
  • Moving to a new location
  • Adding another location
  • Investing in new equipment
  • Upgrading existing equipment and systems
  • Investing in research and development activities

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Industrial liquidation is the liquidation of assets by businesses in the industrial sector of the economy, including:

  • Construction
  • Aerospace and defense
  • Oil and gas
  • Biotech and medical
  • Manufacturing of any kind
  • Iron and steel foundries
  • Food and beverage
  • Automotive
  • Packaging
  • Plastics
  • Pharmaceuticals
  • Transportation
  • Printing and binding

What Industrial Assets Can Be Liquidated?

Anything with cash value can be liquidated, but industrial liquidation refers specifically to the liquidation of physical assets, not investments such as stocks and bonds. Industrial liquid

Industrial liquidation most often involves the sale of:

  • Manufacturing equipment
  • Supplies and materials
  • Inventory
  • Returns from customers
  • Redundant assets
  • Recyclable waste

Who Does Industrial Liquidation?

Some industrial businesses may be able to do their own liquidation through the typical “Going Out of Business Sale” or “Liquidation Sale” approach. However, that takes a good amount of effort and perhaps more time than is available, especially when assets are sold off piecemeal—one at a time or in small lots.

Most companies that need to liquidate assets, especially inventory, surplus materials, or byproducts of industrial processes, prefer bulk sales. Ideally, they will find a liquidator that can take it all off their hands and get paid up front, while the liquidator takes on the task of finding customers willing to pay enough for the liquidator to make a profit on the transaction.

Different liquidators may offer different types of liquidation services.

Auctions

Many liquidators are licensed auctioneers. They typically do an onsite inventory of the assets a company wants to liquidate, prepare them for auction, advertise it and conduct the auction.

Straight Buy Out

Some liquidators offer a straight buy out option, which gives a company immediate cash for the assets being sold. The liquidator offers a price based on the market value of the assets and, upon acceptance of the offer, removes the assets from the company’s premises. This is the simplest solution for most companies.

Consignment

In a consignment arrangement, a company with assets to liquidate consigns them to a liquidator, who will find a buyer and take responsibility for moving the assets to the buyer’s desired location. Consignment often involves the liquidator advertising consigned assets on their own website.

Some liquidators offer storage consignment services. This involves the liquidator moving and storing the assets until a buyer is found.

In a consignment arrangement, the liquidator and the company agree up front on the percentage of the sale proceeds that the liquidator will receive for finding a buyer and providing any related services.

Who Benefits from Industrial Liquidation?

Obviously, companies that have inventory, materials, equipment, or recyclables to liquidate benefit from recovering some of their initial investment in those assets. They also free up space and are spared the hassle of selling the assets themselves. They also benefit from the brand loyalty that comes from gaining a reputation for sustainable business practices.

Liquidators benefit from the profit they make on selling off industrial assets. And companies that buy from liquidators get bargain prices.

One beneficiary that often is overlooked is the environment. Often, liquidators that purchase excess industrial materials and finished goods sell them to recyclers that in turn sell them as inputs to industrial processes or to be transformed into entirely different products. Much of what liquidators purchase from industrial companies might otherwise end up in a landfill. When that happens, all the carbon embedded in those items gets released into the environment. And the energy expended in extracting or harvesting raw materials, producing component parts, and manufacturing those items also was wasted.

How to Find the Right Liquidator

Obviously, RepurposedMATERIALS is an excellent place to begin your search, check out what we keep in stock and reach out to see how we can help you. However, if we cannot look for a liquidator with a track record in your particular industry. Industry experience helps ensure that the liquidator has a strong network of potential buyers for the kinds of items you want to sell.

Also, look for a liquidator that offers the specific liquidation services you’re looking for: auction, straight buyout, consignment or storage consignment. Check ratings sites and customer reviews posted on each potential liquidator’s website. With a little research, a company can make an informed choice of an industrial liquidator.

Contact RepurposedMATRIALS today to find out how we can help you find a new home for the unwanted materials and check out the site to see how we can help you.