WHAT IS EXCESS INVENTORY?
By definition, excess inventory is inventory that a retailer no longer wants sitting on store shelves or a manufacturer wants out of their warehouse. Large retailers need to constantly clear out their remaining old inventory to make room for the new. Large retailers must keep up with the latest products and replenish their stock with the newest models on the market. They are also always getting returns. Product comes back for a variety of reasons, but it all becomes excess inventory that must be dealt with outside of normal retail sales. When faced with large quantities of excess inventory, companies are forced to take a loss just to clear out the excess. They typically call up their liquidator who buys it all at pennies on the dollar. These large liquidators then break up the inventory and sell it to smaller buyers at big markups.