Challenge
A large retailer was sending store inventory annually to landfills due to restrictive return-to-vendor (RTV) policies and desired to build sustainability into its reverse supply chain process. Existing RTV policies and long-standing paradigms can have unintended consequences pertaining to asset disposition. As a result, inventory that was private label, made-to-order, and in many cases already at a low price point, had limited perceived value in the market. As such vendors requested these products be sent to landfills as part of the RTV agreement.
Solution
Liquidity Services proposed a multi-channel sales approach to resell the inventory in question via a range of secondary markets. This customized solution included direct-to-consumer, business-to-business (B2B), business-to-consumer (B2C), and export methods of disposition. Because the available product inventory fit well with the overall product mix offered by Liquidity Services, cross-selling occurred more easily to the existing customer base and helped the retailer exceed the velocity and recovery levels required.
Results
With a Liquidity Services solution, inventory was deterred from landfills, saving on landfill waste disposal fees and the new strategic approach enabled the retailer to achieve its sustainability mission by re-engineering longstanding practices while achieving margin improvements for all parties involved.
- Renegotiated vendor agreements, improving the margins for both the vendors and the retailer.
- Over 100 million units (hundreds of trucks per month) gained recovery value in an environmentally friendly manner, meeting EPA and DOT regulations.
- Private label inventory was deterred from landfills, increasing brand protection and meeting stringent RTV policies.