CEOWORLD Magazine Case study: In this present tense condition of economic downturn which has hurt and closed the doors of a number of major manufacturers (as well as established brick-and-mortar based mega retailers), asset management and recovery companies like Segue Corporation of Rancho Santa Margarita, California, translate into a source of much-needed cash flow for manufacturers with unmoving inventories.
An industry that operates below the radar, excess inventory disposition companies develop relationships and partnerships with manufacturers of worldwide brands. Straight out from the OEM warehouses or from contracted reverse logistics companies, excess, obsolete, b-stocks, or end-of-life products are distributed and supplied to a secondary market within the US and overseas.
As insecure, dollar-strapped consumers curb on their spending, assets pile high in manufacturers’ warehouses. Inventory reduction turns into a headache and can be a nightmarish experience to an inventory manager whose warehouse is stock from floor-to-ceiling with pallets from-out-of-season, surplus, or last year’s obsolete stocks. Economists do not foresee any near-end to the global depression which has put manufacturing activities into a halt in all spectrums of industries. While many OEMs are in the hold-off manufacturing position in order to expend dwindling financial resources into other critical areas of operations, most manufacturers have more than sufficient supply of unmoving inventories and they want to unload these white elephants off their books.
During recessions, there are some unique opportunities that present itself to specific industries and specific businesses. A company with the right product, with a high consumer demand can grow and succeed, like Revlon, a cosmetics company which was founded in the midst of the Great Depression. A feel-good for women during the most depressing times in America, the product that Charles Revson invented: an opaque nail enamel in a variety of new shades with pigments instead of dyes became successful from the start. Soon, it made its way to department stores and drug stores. In six years the company became a multimillion dollar organization. Segue Corporation,. already a market leader in the remarketing and reverse logistics services historically has made money during the last couple of recessions.
In contrast to the gloomy prospects and doomed fate faced by a great number of American businesses, both large and small, Segue’s warehouse is a hub of activities, a good sign that it is flourishing in the midst of the current economy likened by some experts to the Great Depression. Segue has hardly breathing room for new and burdened inventory holders with unmoving goods requesting Segue to liquidate their inventories- and fast for cash. However, according to Steve Vertun, one of the founders and managing partners of Segue Corporation, the company has embraced a corporate strategy to continue selecting and supporting several of the world’s best known manufacturers so it can provide the highest levels of focused service available.
Stocked with a constant flow of excess inventories, Segue’s strong sales force, trained in providing excellent customer service and equipped with thorough product knowledge of every product they sell, take orders for products ranging from computer keyboards, mouse, bags, speakers, chemicals, personal groomers, among many others. These are then supplied by distributors and exporters to eBay merchants, e-retailers, mom & pop stores, flea market vendors, 99 cents stores and other discount outlets.
Tense consumers, tightening their belts are realizing that it makes dollar sense to buy on a discount. As consumers learn sensible purchasing habits, more and more retail stores are losing customers. At this point, where the national unemployment is high and continues to climb, where a job does not guarantee security, the newly-wise consumers know that to survive this economy, one must learn how to economize. And if it is necessary that a purchase has to be made, why pay retail? In this day and age, one has to know how to stretch the dollar. Thank goodness for Segue!
CEOWORLD Magazine Case study: By Maria Lim (firstname.lastname@example.org)