OVERSTOCK PRODUCT DESTRUCTION

Disposing of overstock inventory by way of liquidating the products to the secondary market or selling to existing customers at extreme discounts can cause significant problems for a company.

The saying goes that people value that which they give value for, often cited as the reason why consumers have little ongoing demand for inexpensive items, yet highly prize items for which they paid a larger proportion of their disposable income.

When you consider all the ways that you have marketed your products and your brand to your customers, you will discover that one of your primary aims was inevitably for customers to perceive a high value in your brand, your reputation, and inevitably, your products.

When your products are later sold at extreme discounts, the message and brand reputation you have worked so hard for will be irreparably cheapened. Customers will wonder why they should be expected to pay an inflated rate for one of your products when another of your products is so heavily discounted?

Similarly, for liquidating your excessive stock to a third party: when your products appear in seconds stores, warehouse sales, or factory direct outlets at hugely reduced prices, the trust in and perceived value of your company and your brand will be affected.

While liquidating or drastically reducing your overstock products may help your cashflow in the short term, the long-term disadvantages could be devastating.