The Difference between Auction Sales and Liquidation Sales

By Clifford Woods

When businesses find themselves with the need to recuperate resources, there are several options they take into account. The most typical way to recover assets is by auction and liquidation sales.

Liquidation and auction sales are used mainly by stores wanting to get rid of excess merchandize and get as much money for them as possible.

Knowing the difference between these two kinds of sales can certainly help one make the right decision if a company is confronted with the need to sell property or equipment.

In the following paragraphs we’ll go over the differences between auction sales and liquidation sales.

What Are Auction Sales?
Auctions are known as the opposite of liquidation sales because they are very fast; from start to finish.

The advantages of auction sales include:

• Prospective buyer can drive price ranges up.
• The Internet can attract bidders from around the globe.
• Auctions often occur when an organization has excess products they want to get rid of.
• Auction sales are fast from beginning to end. An auction deal involves the setting up of the equipment, the auctioning process, and the cleanup. All of this may take no more than ninety days.

The only real problem with an auction is the fact that items may not always sell for the value predicted. Competition amongst bidders is what decides an item's value and sometimes there isn't enough competition to drive a price up to the desired amount.

About Liquidations Sales: Liquidation sale is the procedure for marketing the assets of a company in an organized manner over an extended length of time to achieve greater values that are nearer to retail price.

Liquidation sales are just like store closing sales in that a special corporation might come into a store to sell the rest of the extra inventory. They are usually lengthier sale processes, in which products are sold throughout weeks, months, and even several years.

Industrial liquidation sales usually involve the retailers reviewing offers and discussing selling prices.

The primary benefits of organized liquidations include the following:

1. Extended selling time. This allows sellers to have plenty of time to find the best buyer for their products, which could often mean that they will sell for higher prices. Though in most cases they will settle for less in order to get rid of the product right away.
2. Discussion between the seller and buyer determines what an item is sold for.
3. Works more effectively for more customized or unique products. Often there are minimal buyers for such products; liquidation sales provide sellers with the time to locate buyers.
4. The main advantage is the time frame: more time to carry out the sale means that there is more time to find the perfect buyers. For this reason, if you are a buyer you should provide the companies in your area with your personal information so that they come to you whenever there is a liquidation going on.

Liquidation sales do have a downside though in that products must be stored on site until the sale. 

Liquidation sales are best for buyers since they will be able to grab merchandise for only a fraction of the cost they would get it for at an auction. After most of the items have been sold through the liquidation process, equipment and workplaces devices are often sold at an auction.

It is an effective way to sell off resources from a factory once most of the items have been bought. Both kinds of sales work effectively to help restore assets. For buyers, a liquidation sale would be the best bet when it comes to making money since an auction might drive the price way past the amount you are willing to pay.
---

Clifford Woods is the owner of Rapid-Liquidations
We buy complete inventories of unwanted or discontinued consumer merchandise for cash and sell complete inventories of consumer merchandise at about 15 to 20% of retails prices!
If you are interested, we also have a complete, easy-to-follow manual on how to get started in this business yourself.