Traditional Inventory Liquidation Buyers & Brokers vs. a Liquidator for Good – A Comparison

Updated: Apr 17, 2023

Liquidating inventory is typically facilitated by liquidation buyers and/or brokers. This blog explains both roles plus a new liquidation solution for companies that want to 'do some good' with their excess inventory and create charitable cash donations.

What is Inventory Liquidation?

Inventory liquidation is the clear-out and/or sale of goods to create warehouse space and/or cash due to these typical situations:

Excess Inventory: companies have too much inventory sitting in their warehouse (e.g. low sales, over-purchase to avoid supply chain issues) and need to make space for new goods as a result of changing seasons, styles, trends, and technologies, or to make room for the latest and greatest products.
Business Shut Down: companies are closing down their business as a result of retirement, slow demand, increasing expenses, low profitability, etc. and need to clear out their inventory.
Bankruptcy: companies are going through bankruptcy and are required to sell goods to repay creditors and move out of their retail space and/or warehouse.

No matter the reason, when companies (e.g. manufacturers, retailers, wholesalers, distributors, etc.) experience a growing inventory problem, clearance sales, and special promotions are the typical 'go-to' solution. But, when blowout promotions don't solve the excess problem, inventory may be donated to charity (which can create challenges for the charity), liquidated, taken to the landfill, or destroyed/incinerated.

Types of Liquidators

In the closeout and liquidation business, there are typically two roles that facilitate the liquidation transaction:

Liquidation buyers typically work for a closeout store or retailer purchasing goods for their own store and clients. Buyers may purchase products directly from a supplier (retailers, manufacturers, etc.) or from a broker.
Liquidation brokers typically never own the product. They have a network of people they contact (buyers or other brokers) to find someone to purchase the goods and will facilitate purchase, pick-up/delivery, and sale and take a commission from the sale as payment for their services to facilitate the transaction.

Did You Know? Some Liquidation Brokers may purchase products directly from a supplier, ship the inventory to their own warehouse and then find a buyer (and then they ship goods from their warehouse to the buyer) OR they find a buyer, then arrange product pick-up from the supplier and ship directly to the buyer which minimizes transportation, environmental impact, and logistics costs.

Read 5 Types of Dead Stock Wanted by Direct Liquidations Stores and Brokers.

Traditional Liquidator vs. a Liquidator for Good

In the race to divert inventory from the landfill before its time, there ARE companies doing some good with excess inventory. One of which is The Charity Hub.

The Charity Hub is a Liquidator for Good – a new liquidation solution that behaves like a traditional broker but with a purposeful mandate to turn deadstock into cash donations for the product supplier's favorite charity.

Here we explain the differences between a Traditional Broker and a Liquidator for Good with questions to ask current or prospective brokers to find the right partner for your organization.

Traditional Liquidation Broker	Liquidator for Good The Charity Hub (TCH)
Company History & Experience Varies by Broker – Be sure to ask! Ask: What’s your company’s primary goal? How long have you been in business? What’s your experience as a liquidator?	Company History & Experience TCH’s primary goal is to make our world a better place by creating charitable cash donations through the responsible liquidation of excess inventory. TCH has been in business since 2021; however, our CEO & Founder Dave Rolleston, and President Jon Sugar have been involved in the liquidation/closeout and eCommerce business for over 20 years. We have a team of liquidation specialists. Visit thecharityhub.com and our YouTube Channel.
Competitive Advantage Varies by Broker – Be sure to ask! Ask: What makes you unique compared to other liquidation brokers?	Competitive Advantage TCH competitive advantages include: Mandate: TCH’s primary goal is to make our world a better place by creating charitable cash donations through the responsible liquidation of excess inventory. Transparent: TCH follows a similar process as a traditional liquidator but as a Liquidator for Good, we donate 50% of our net profits back to a charity of our supplier’s choice. CSR/ESG: TCH's model helps divert goods from the landfill before their time and creates charitable funds supporting the supplier's Corporate Social Responsibility (CSR) AND Environmental, Social, and Governance (ESG) goals. TCH also provides an *Impact Scorecard* after each transaction for suppliers to use in corporate reporting. Responsible: If TCH can't sell something, we'll recycle it, donate it, or work with the supplier to find a feasible solution. The landfill is the LAST resort. Partner: The TCH team has decades of liquidation experience and has a global network of buyers and logistics partners. Think of TCH as an extension of your external sales team and a source for market information.
Product Types Varies by Broker – Be sure to ask! Ask: does the broker buy/sell one, some, or all of these types of products? New products Refurbished products Customer-returned products Salvaged products	Product Types TCH handles: New Obsolete / Excess Inventory Refurbished products Customer-returned products Salvaged products from insurance claims
Product Preferences Varies by Broker – Be sure to ask! Some brokers may specialize in technology, apparel, tools, etc.	Product Preferences TCH liquidates most consumer products found at Walmart, Target, Superstore, Costco, Best Buy, Home Depot, etc. TCH prefers: household products (dishes, cutlery, cleaning supplies, décor, etc.), tools, small & large appliances, major brand-name apparel/footwear, personal health products (face creams, cosmetics), small & large furniture, computer hardware and beyond! Contact us and we’ll let you know if we can liquidate it! TCH typically avoids: food & beverage, expired products, used clothes & low volume with <12 pallets of product (unless high value).
Product Price Varies by Broker – Be sure to ask! Price is negotiable. With traditional brokers, suppliers typically only know what the Broker bought the product for – not how much profit the broker made! You could be missing out and financing their Ferrari!	Product Price Price is negotiable BUT creating charitable donations is TCH’s top priority. TCH prefers no-cost or extremely low-cost products suppliers have written-off or written-down and want to liquidate for a cause. TCH DOES buy products! With TCH, you'll know how much WE sold the product for by the donation amount we make (on the supplier's behalf). TCH donates 50% of our net profits back to a charity of the supplier’s choice.
Product Placement Varies by Broker – Be sure to ask! Ask: How does the broker ensure liquidation of the product(s) doesn’t dilute the brand or negatively impact regular distribution channels? Ask: Where do you sell products to?	Product Placement TCH complies with supplier liquidation instructions as both our reputations are on the line! Restrictions: TCH works closely with suppliers to understand any geographic and/or retail distribution restrictions to avoid any regular distribution channels. Once TCH understands these, we approach our approved global buyer network. Geography: 90% of TCH's business happens in North America; however, we are Canadian-owned with global experience. Depending on supplier restrictions, inventory could stay in-country or go around the world.
Product Representation Varies by Broker – Be sure to ask! Ask: How do you represent our products?	Product Representation Integrity is a core value at TCH. We partner closely with our supplier partners and act as an extension of your sales team. We take the time to understand the marketplace our suppliers serve and present products professionally while ensuring customer confidentiality.
Product Pickup Varies by Broker – Be sure to ask! Ask: Will you pick up the product before a buyer has been found?	Product Pickup Depending on the product and price, TCH may buy and pick up the product before a buyer has been found. Whenever possible, TCH prefers to pick up products from suppliers and ship direct to the buyer to minimize the environmental impact and transportation costs to maximize charitable donations. Lower shipping costs for TCH = more cash for charity!
Corporate Social Responsibility Varies by Broker – Be sure to ask! Ask: Tell us about your corporate social responsibility initiatives.	Corporate Social Responsibility TCH’s Triple Impact Liquidation Model diverts goods from the landfill and creates charitable donations for the suppliers-chosen charity. TCH's Impact Scorecard highlights the weight of goods diverted from the landfill and charitable donation amount for suppliers to include in their CSR and ESG reporting.
Sustainability Practices Varies by Broker – Be sure to ask! Ask: What do you do with products you can’t find sell? (landfill?) What are your sustainability practices?	Sustainability Practices TCH is a Liquidator for Good. If TCH Can’t Sell Product: TCH will recycle it, donate it, or work with the supplier to find a feasible solution. TCH has as network of recycling and charity partners. Sustainability: Whenever possible TCH tries to find buyers near the product(s) location to minimize transportation emissions. However, depending on supplier distribution restrictions, inventory could stay in-country or go around the world.
Customer Returns Varies by Broker – Be sure to ask! Ask: Does broker handle customer-returns? If so, does broker have a reverse logistics infrastructure? Or will dispose in landfill? Other?	Customer Returns TCH can receive, sort, repackage and responsibly liquidate customer-returned goods without negatively impacting the supplier's regular sales channels.

Summary

Whether you choose to work with a traditional liquidation broker or a Liquidator for Good, it’s important to find the right partner. Discover the 14 Questions to Ask Your Liquidator and Wholesale Liquidation Broker to find the right partner to make sure you maintain brand integrity, don’t dilute your regular distribution channels, or have inventory end up in the landfill when it wasn’t your intention.

Ready to Turn Excess Inventory into Donations?

If you have excess inventory that you would like The Charity Hub to turn into charitable donations for YOUR company’s favorite cause or Foundation, contact us. We’ll have an introductory call to learn more about each other and determine if there is a mutual fit.

I Want to Liquidate for a Cause

Additional Resources

About The Charity Hub

The Charity Hub (TCH) offers a unique triple-impact liquidation solution that helps companies support their corporate social responsibility and raise their Environmental, Social, and Governance (ESG) profile by buying excess, refurbished, and customer-returned inventory and turning it into charitable donations. As a Liquidator for Good, TCH makes it easy for global manufacturers, distributors, retailers, warehouses, and insurers to responsibly liquidate inventory by coordinating all logistics and sales, and then donating 50% of TCH’s net profits to the suppliers’ preferred charity. Our expertise is liquidating inventory, our power is giving back. To learn more about turning excess into impact, contact The Charity Hub.