Consumer electronics will once again top holiday wish lists this year, and while they are highly sought-after, they also boast one of the highest return rates of any product category, as up to 20 percent of CE items are returned.
This is due to a number of reasons, including:
*relaxed cross-channel return policies;
*the increase in online purchases (which come with a higher return rate); and
*buyer’s remorse and gift-recipient dislike.
Buyer frustration also plays a big role in consumer electronic return rates: the average person will spend 20 minutes trying to get a device to work before getting frustrated, giving up and returning it back to the store.
Whatever the reason-for-return, millions of dollars worth of consumer electronics merchandise – once gifted and unwrapped – will be heading back to retailers post-holiday, and though much of it will be in functionally and cosmetically perfect condition, it can’t be put back on store or virtual shelves to be sold as new. Having a plan in place for these items, especially those that can’t go back on the shelf, is crucial, and ensuring you recoup top dollar can mean the difference between winning and losing this holiday season.
So, what makes for a successful plan and how can a retailer quickly turn this “risk inventory” into the maximum amount of cash possible?
The most important first step to recouping maximum value for the merchandise is implementing a solid remarketing strategy. Most likely, you already have a process in place for disposing of your merchandise slated for the secondary market. If you are like most retailers, that plan likely involves selling to one or two liquidators which means (a) you are more dependent on your liquidator than you should be, and (b) your recovery is much lower than it otherwise could be. Liquidators are professional negotiators who are experts at figuring out the absolute lowest price you are willing to accept for your inventory. What’s more, time spent negotiating deals for every lot of merchandise you have to sell takes you away from core, strategic business activities. This can equate to millions of dollars lost over time.
A better solution would eliminate your dependence on any small group of liquidators and set up a dynamic where many buyers push prices up rather than negotiating them down.
Just like in the primary market, consumer electronics are in high demand across the secondary market where a robust buyer base exists for CE products regardless of condition or model. The ability to gain direct access to this buyer base can substantially increase recovery while saving time and in-house resources (and you won’t need a call center of people hitting the phones either).
A private, online auction marketplace platform is one way to make this happen. The best platforms available can be configured, integrated and scaled to meet your unique needs. This type of technology will not only deliver the highest possible price in the market at the moment, but it will also automate the sale process, deliver a faster sales cycle, and generate proprietary market intelligence in the form of real data on market prices. Now liquidation becomes a strategic asset rather than a dreaded afterthought.
Some of the largest multi-channel CE retailers, big-box stores and gaming companies are using this approach and increasing recovery for their returned and excess CE merchandise by 30 to 80 percent, and sometimes much more.
While investing a little time to familiarize yourself with the secondary market and reassess your remarketing channel will have a big impact on the bottom line, sometimes leveraging expert knowledge will provide the most effective outcome (not only post-holiday but all year ’round). By combining world-class, purpose-built technology with a highly-experienced team that understands dynamic pricing, online marketplaces and demand generation, you’ll have a winning formula.
In today’s return-happy landscape, it literally pays to rethink whatever program(s) you have in place for the handling and remarketing of this merchandise. Every dollar increase in recovery value, or reduction in expense, equals another dollar of profit. This extra profit is especially significant after the holidays when return rates often double. Are you ready for the rush?
Howard Rosenberg is CEO and co-founder of B-Stock Solutions, a technology company powering one of the largest networks of private-label B-to-B liquidation marketplaces. Hundreds retailers, including four of the Top Five U.S. retailers, have leveraged B-Stock Solutions’ technology and service offerings to sell billions of dollars in consumer-returned and excess inventory.