Liquidating business promotion
Too many sales in one town, too often, spoil the market for everybody.
Most experienced promotion companies will ask you, in the interview, “When was the last sale conducted in your town or market area?
First, unless some other arrangements are made, the liquidator usually charges a commission.
This commission, as you would expect, is a percentage of the total gross sales of the store during the event.
These fees can vary, but fifteen percent is a ballpark figure.
Second, the store owner usually pays for all advertising.
Although it is certainly not the only reason to hire a liquidator, the most common reason a store owner would consider a third party sale, is when he is thinking about closing, for good. A cash raising sale is an event to inject some high voltage into plodding, faltering store performance and image.
If your sale is not a retirement event, or a GOB, and you intend to remain in business, advise your liquidator to plan the sale to ENHANCE your store image, not degrade it. They are going to try to make it look like you are going out of business.The usual “nut.” Fourth, the store owner will normally pay for all of the new inventory coming in. And, having to buy inventory that I don’t even recognize? They may offer, if they perceive a good possible return, to assume all expenses, and give the store owner a share of the sales, or profits. Your profit margin is 40 percent, leaving you with a gross profit of K per month.Since some stores are in financial crisis at the outset of the event, the liquidator may have ways to work with you on this problem. Your total monthly expenses, which include advertising of .5K, are K per month.The idea is to MAKE MONEY, not break even, or worse, lose money.If you’re still reading after that last example, you may be wondering what your role is in the sale.
Your advertising expense will be higher in a sale than you are normally used to paying.