Are you seeking to optimize your industrial operations, upgrade and replace equipment, or liquidate surplus assets? If so, industrial liquidators can be invaluable partners to reduce your inventory position, improve carrying costs, and make space in the warehouse. 

In this overview guide, we'll explore options for industrial liquidation and provide insights on how to choose the right liquidation partner.

What is industrial liquidation?

Industrial liquidation involves the sale or disposal of surplus assets, ranging from MRO parts to entire facilities. This process is commonly undertaken by companies looking to downsize, upgrade, or close operations. It’s also part of normal operations for manufacturing plants – replaced machines often still have value and can be resold. MRO parts have a tendency to pile up even when they’re no longer needed.

Businesses can recoup valuable capital by converting idle or underutilized assets into cash, which can then be reinvested into core operations or utilized for strategic initiatives. Additionally, liquidation enables supply chain teams to reduce their inventory, thereby reducing associated storage, maintenance, and depreciation costs. Finally, by shedding excess inventory, companies can optimize their resources and enhance operational efficiency, freeing up valuable space within facilities and potentially expanding their productive capacity.

Different types of industrial liquidators

Liquidation isn’t limited to companies that call themselves liquidators – in fact, there are many different options for disposing of unwanted equipment and inventory. 

1. Liquidation Companies: These firms specialize in the complete or partial liquidation of industrial assets. They typically purchase assets outright from businesses or facilitate the sale of assets through various channels, such as auctions, private sales, or online marketplaces. The liquidation market is extremely fragmented; there are a few larger players, and then there’s a huge number of small operations.
2. Auction Houses: These entities facilitate liquidation auctions, either online or in-person, where surplus industrial assets are sold to the highest bidder. Auction houses often have extensive marketing capabilities and a wide network of buyers, making them a popular choice for liquidating assets quickly and efficiently.
3. Asset Recovery Specialists: These professionals focus on recovering value from distressed or obsolete assets. They may specialize in salvaging components, refurbishing equipment, or repurposing materials to maximize returns for businesses facing challenging circumstances. They tend to focus on high-value items like old manufacturing machines that still have decades of useful life.
4. Equipment Dealers: These businesses buy and sell used industrial equipment and machinery. While they primarily function as sellers, they may also offer buyback or trade-in options for businesses looking to liquidate surplus assets.
5. Consulting Firms: Some consulting firms offer services related to asset disposition, providing strategic advice and guidance to businesses on how to optimize their asset portfolios and maximize returns through liquidation.
6. Online Marketplaces: Platforms like eBay, Machinery Trader, and EquipNet provide online marketplaces where businesses can list and sell surplus industrial assets directly to buyers worldwide.

The best option (or options) for you will depend on your facility and business' unique situation. Need speed? Auctions are a good bet. Looking to maximize recovery? Asset recovery specialists will wring every penny out of your best equipment.

How to choose the right industrial liquidator

The right type of liquidator and the right partner can have a big impact on the speed, efficiency, and return of the process. Here are some key factors to consider when choosing:

Speed

If you need to clear space out of your facility quickly, then you need one of two things: a buyout offer from a liquidator, or a partner that can run an auction on your behalf. Between those two options, the buyout is the “sure thing”, while an auction has higher upside and also higher risk.

Searching for quick industrial liquidation buyouts isn’t an easy process due to market fragmentation; trying to secure quotes from a large number of small companies is a headache. On the other hand, you can usually get a buyout from one of the “big guys” like Radwell or Liquidity Services, but their offers often hover around 1-2% of asset value.

Recovery Expectations

If you need to maximize the money you get back, then you’ll need to slow down the liquidation process.

The highest recovery theoretically can come from selling yourself on marketplaces like eBay, where prices are high. The downsides are many, though: sell-through rate is slow, there’s significant risk you won’t sell at all, and it eats up a considerable amount of your team’s time. The whole point of liquidation is moving on to more pressing strategic priorities, so this option rarely is worth the investment.

Asset recovery specialists will take their time selling your highest-value items on secondary markets, and in exchange they’ll take a good chunk of the proceeds. If they sell an item for 10% of its list value, though, and they take 50% of the sale, you’re still left with 5% of the asset value; considerably more than you’ll get at buyout.

Complexity can rise to quickly unmanageable levels when trying to maximize recovery, because large lists of obsolete assets will have to be broken up into tranches. You’ll need to sell your CNC equipment to CNC specialists, bearings to bearings specialists, and so on and so forth. Not to mention, a large portion of your MRO parts (80-90% of the list) are likely functionally worthless on the secondary market because their shipping & handling costs will rise above their resale value.

Trust & Compliance

Industrial liquidation options that don’t specialize in liquidation can be difficult to work with as they’re less expert in corporate governance associated with selling assets. I’m sure our supply chain readers are familiar with collaborating with their finance teams on depreciating and writing down assets, they know that it’s not trivial to sell an old spare part without properly accounting for it.

The liquidation world can feel a bit “sketchy” at times, and it’s important to ask your partner up front how they account for and report on asset sales, especially when you’re working with them on consignment. Reduce risk in your supply chain with a partner that knows corporate compliance.

Amplio: a new path for industrial liquidation

At Amplio, we specialize in making the complex world of industrial liquidation simple for our clients. Just send us your list of surplus along with your business needs, and we’ll do the heavy lifting for you.

Need a quick buyout? We’ll canvas our network of over 50 specialized liquidators to surface the best offers and get you more for your inventory, fast. Want to maximize recovery? We’ll split your list across specialized consignment partners who will take their time selling, getting every last penny back to reinvest in your business. All the while, we will be your single, trusted point of contact.

What makes us unique? It’s our software and our network. 

Our software collects and analyzes daily transaction data from leading marketplaces to adjust and determine the best reselling strategy. We can tell you what items you should scrap to immediately free up warehouse space, and which you should sell slowly to maximize recovery. 

Then we execute the liquidation on your behalf, using our extensive network to ensure you get the most competitive offers for your inventory.