The Challenges of Excess Inventory in Manufacturing

While excess inventory can ultimately impact a manufacturer’s bottom line, they often resort to high-overhead marketing promotions, rebates, or complete inventory write-offs to deal with it. Inventory in manufacturing is a dependent variable based on the inputs of many factors including: demand and demand variability, supply lead time and lead time variability, supply chain design, manufacturing capabilities versus customer purchase characteristics, transportation modes, and desired service levels. With such a confluence of variables, excess inventory is bound to happen from time to time where a supply chain or market correction is not evident on the horizon.

The reality is that in the manufacturing world where lean principles and just in time manufacturing aren’t always a remedy to avoid excess inventory these companies must find less detrimental ways to address the problem when it does occur. While web-based auctions are increasingly a means to effectively deal with excess inventory (which has in some cases proven to increase recoveries by 20 percent or more), many manufacturers aren’t in the best position to develop, manage and oversee such tactics.

By working with an inventory liquidation and auction specialists like Ideal Trading, businesses can effectively outsource the process with a clear return threshold. Since we buy your excess inventory, we can deliver a specific contractual amount based on an assessment. Having a great deal of experience in online and point auctions Ideal Trading has the broad base of connections and resources to liquidate your excess inventory after effectively purchasing it from you.

That enables you as the manufacturer to quickly resolve the inventory issue and get a fair market return on the inventory. This can all happen without the expense and headache of managing the auction process, which can have uncertain outcomes for those that do not specialize in that arena.

When we buy, buying your excess inventory is not a gamble as we have the experience to and skilled experts to calculate fair market value as well as perform analysis on the best potential buyers that may be located in the U.S. or elsewhere. For you as a manufacturer, the challenges of excess inventory may arise very intermittently and often without warning. That means that the physical (storage cost and transport) as well as the fiscal aspects (the costs of that excess inventory on the books) can tie the business up when it comes to the supply chain and production cycles.

Although the goal is to remedy the situation as quickly as possible the goal is to not have to write the inventory off as a total loss or hold onto it for an excess amount of time preparing to move it at an uncertain expense. Having a partner like Ideal Trading that understands how the manufacturing industry works across countless vertical enables you to get the highest return possible in the shortest amount 9f time. That makes for a healthier manufacturing supply chain and a healthier bottom line.

Ideal Trading Corp is a liquidation company in New Jersey that offers services for businesses to convert their assets to cash. With extensive experience in commercial liquidation and auctioning, we provide outstanding results for business owners who are going out of business, facing bankruptcy and more. 973.343.6684 – Contact us today!