There are many reasons you might seek asset liquidation, such as a store closure or surplus inventory of discontinued merchandise or overstocked items. Whatever the reason, a liquidation sale is your opportunity to collect revenue for "extra" merchandise. There are several companies in the liquidation business that can help you with the logistics of a liquidation.

The attraction to the public of liquidation closeouts rises in tough economic times as people try to get more for their money. When conditions are right for you to sell off your inventory, contact a liquidation provider that can help you with a sales plan, time line and marketing. Remember that if you are closing a store or stores, you'll need to decide whether store fixtures are part of the liquidation sale. As you look for a liquidator, keep the following things in mind:

1. Your stock will generally fall into one or more of three categories: products replaced by newer versions, products that have outlived their shelf lives, and returned products.

2. If your closeout sale is large, it is key to get the information out to the public.

3. You can manage a liquidation sale on the premises or online.

Action Steps
The best contacts and resources to help you get it done

Plan your liquidation sale with a liquidation business

Find liquidation experts online. Share information about your merchandise and pricing and request a proposal of services. Make sure the timing and pricing meet your expectations.

I recommend: A plan and consultation from Liquidity Services will help you liquidate your assets or sell your surplus goods. Liquidation.com provides a step-by-step guide for sellers of surplus and closeout items.

Get your liquidation information out to the broadest network possible

If your business is local, you can post signs in stores and advertise in the local paper. For liquidations across a broad geographic area, online notices and specialized communications work best.

I recommend: Whether your store is going out of business of selling surplus items, you might want to advertise in the Closeout News. For a quick presence on the Internet, post your company's closeout inventory on Wholesale EZ.

Choose an online auction to liquidate your assets

If you don't have the time and patience for in-store closeouts, liquidate your goods through online sales and auctions. You can turn management over to a liquidation company and you won't be troubled with physical inventory in your store. You will have to ship your merchandise to a warehouse for the sale or auction.

I recommend: At Overstock.com you benefit from the advertising power of the Overstock name. United Auction is a liquidation business. They can manage the auction online or send auctioneers to your places of business.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  If time is of the essence, consider selling your inventory to a wholesaler. You will probably receive less for your merchandise but can move the stock quickly and complete your liquidation in a timely manner.

The prospect of a recession will have savvy entrepreneurs salivating. There is no doubt that the economic downturn will spell doom and gloom for some. Others will see opportunities in the slowing economy. It is entirely possible for home businesses and entrepreneurs to flourish while bigger businesses flounder.

Numerous chain stores have already filed for bankruptcy protection. In the case of Bombay, liquidators have taken possession of the goods and premises. This trend of bankruptcies will only continue as companies do not emerge from Chapter 11 protection.

Meanwhile, tightening profit margins on eBay mean that sellers need to find new ways to reduce costs. Purchasing from liquidators is one way of capitalizing in a period of flux.

Here are some strategies for those wishing to enter the relatively untapped liquidation market.

Action Steps
The best contacts and resources to help you get it done

What Is Liquidated Stock?

Many people don't know what liquidated stock is. And are put off by this fear of the unknown. When a business like Sears, Macy's or Kmart stock their stores they buy in wholesale to get access to prices that Joe Public cannot. However, the stock has a shelf life. The products that don't sell in an efficient time are pulled from the shelves and liquidated, sold on, to another vendor. The store takes a small loss on this. In large retail businesses this is just a normal operating expense but with tightening economic conditions there will be a greater number of liquidations due to Chapter 7 and 11 Bankruptcies.

I recommend: Finding out more about the liquidation process if you're still unsure. The Forbes Guide to liquidation is short and simple.

Decide Which Kind of Stock Will Suit Your Business

It's important to note that liquidated stock generally falls into two categories. 'Store Stock' is stock that has been pulled from shelves because the range has been discontinued, trends have changed or the store has closed down. This is the highest quality of liquidated stock. The second main type is 'Store Returns' - items that have been returned to the store. Most returns are because of size, color and appearance. On occasion damaged goods are returned to the store. However, spoiled or damaged products usually only make up 15% of store returns.

I recommend: Checking what kind of Liquidated stock you'll be purchasing before ordering. Speak to the supplier and ask, "Have the goods been returned, are they salvage, or are they from the shelves?" Have a look at the Best Buy returns policy to get an idea of what to expect from store returns.

Choose a supplier

There is a perception that to get access to liquidated stock there is usually a minimum amount of that needs to be spent. Liquidated stock usually comes in by the pallet load, and with large amounts of stock comes a large price. An average pallet is usually $900, a hefty price for many cash strapped entrepreneurs. So it's important to find a liquidator that will suit your budget.

I recommend: Beginning with small order to ensure that the quality is up to standard. Asking for a sample is often a good way of gauging how a reliable a supplier is. This way if the quality is average or the shipping is terrible a large amount of money won't be wasted.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Buying goods that are not in perfect condition doesn't have to be a problem. With some work it's possible to clean up, fix or polish some of the goods. This is where the bargain factor comes in. A slim portion of the population can afford a $500 sheet set from Macy's. A portion that is decreasing as times get tougher, but if it's a $500 set with a tiny tear then $100 looks like a great price. Factor into the equation that the set probably cost $30 on the pallet and the profit margin is fantastic.
• •  Be weary of 'Cherry Picking' liquidators. 'Cherry Picking' is the practice where liquidators pick the best goods from the pallets they receive to sell themselves. This can severely limit the value of the pallets that are passed on to customers. Solve this problem by being up front with your supplier and ask, 'Do you cherry pick your pallets?'

The idea of helping a business out with liquidation has always been a part of the general retail business, but these days, with the implosion of some large, high-profile shops with stores across the country, liquidation training is taking on a whole new meaning. With these giants of retail closing their doors, many smaller shops are likely to follow suit, and the need for liquidation closeouts training and consulting seems to be at its peak.

For businesses that are looking for a helping hand with liquidation, help is available through the web: various firms and agencies offer assistance with planning a liquidation and many of them have a web presence. Readers can find:

1. Training classes and seminars on liquidation sale procedure and other aspects of managing a financial scaling-down.

2. Consultants on asset liquidation and firms that will help train staff on how to execute the event.

3. More materials and resources from public info sites on liquidation.

Action Steps
The best contacts and resources to help you get it done

Find liquidation training online

Some pages will offer business leaders access to options for getting staff trained in a lot of different financial aspects, including how to liquidate an inventory as well as 'endgame accounting' and how to minimize liability.

I recommend: Get business liquidation information from this manual at Business Liquidation. For video training and other resources, check out Power Retailing.

Find liquidation business training from consultants in retail

Companies that offer nuanced and thorough liquidation consulting can help with training staff on how to deliver the best results in a time of economic hardship.

I recommend: Quitting Business can help your business develop an "exit strategy" that works. Find out how this company can assist in training staff on the right methods for a liquidation sale. Get more of this kind of help from Retail Sales Consultants.

Locate training and educational materials for asset liquidation

There's more available in the form of training and liquidation directory materials and links that address liquidator options in a business environment. Some sites showcase these, and others are 'pathways' toward a holistic solution. It's up to the captains of these ships to find the right results for closing down a store in the best possible way.

I recommend: The Business Owner's Toolkit has a set of materials for helping to deal with liquidation for businesses online. Read Small Business Notes for more useful advice and education.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  The liquidation education and training sought for and provided by a forward-thinking floor manager, sales captain or regional manager can bring in a lot of dividends, though they may be set against the specific liabilities that led to the closing. Make sure your efforts are advertised to the top leadership, to be able to benefit from the power of your decisions and get credit for quick, money-saving action in the face of adversity.
• •  As duly reported on the nation's news programs, liquidators can sometimes engage in some pretty tricky accounting to get their own cut of the profits from selling a closeout inventory. Keep your eye on the fine print to keep your share.