If you decide to close your store – whether because you are retiring, or going out of business for some other reason – you may have someone recommend bringing in a liquidator.  Happily I haven’t had any personal experience with this type of company, but many years ago a store in our neighborhood hired one to close down their children’s furniture and clothing shop. This was a long time ago, however I still remember that the move caused a lot of discomfort among their customers, because no one really understood who these people were and why they were there.

By definition, a liquidator is a person or company brought in to dissolve a company (hence the name). In retail, that usually involves selling the inventory and fixtures on behalf of the owners for as much money as possible.  A shop only needs to be liquidated if it’s not being sold as a going concern, of course – and you may do just fine selling off your own fixtures and merchandise.  In Specialty Shop Retailing: How You Can Succeed in Today’s Market, I suggest starting at a discount of 20% and then gradually increasing it until the majority of the inventory is gone.

 So why do some stores bring in an outside company to handle the sale?  One reason is if the court orders it as part of a bankruptcy filing. Some business owners also find a liquidator helpful if they are closing due to ill health, unable to staff the store during its final weeks, or in need of a way to reduce stress during this difficult time. Ideally a liquidator will be able to maximize your income during the process. They do, of course, charge for their expertise.

The liquidation firm that our neighboring business hired brought in a lot of its own merchandise during the sale, which was apparently not uncommon at the time. Some companies will use promotional gimmicks to help drive traffic.  They may bring in their own staff, replacing the familiar faces behind the counter.  As an article on Retail Dive states, “These are boom times for liquidators.”  It goes on to mention that the big four companies – Tiger Group, Hilco Global, Gordon Brothers and Great American – are experiencing incredible growth due to the closing down of some of American’s largest retailers.

Bob Negen’s WhizBang Retail Training, an organization I respect, recommends a group called POWER Retailing for smaller stores needing to close.  Run by another Bob – Bob Nelson – POWER Retailing offers “cutting edge solutions to quickly increase sales, liquidate inventory and reduce marketing costs,” according to their website. They say that they coach and assist businesses in doing going-out-of-business sales, providing strategies that have been successfully used to close other stores.

If you ever face the decision to shut up shop, examine all the options open to you.  And as I mention in my book, remember that you don’t have to be open for decades in order to have been a successful retailer. It is a major accomplishment to have brought your dream to reality.

Happy Retailing,

Carol “Orange” Schroeder

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