‘Jobbers’ sweep out overstocks

No matter how prescient the merchandiser, every cataloger at some point ends up with overstock. While there are a range of liquidation options, including package inserts, outlet stores, and sale catalogs, more catalogers are turning to liquidators, or “jobbers,” which buy overstock from a variety of merchants, then resell the goods. According to the 1998 Catalog Age Benchmark Report on Operations, 19% of respondents are using liquidators-up 5 percentage points from 1997.

Although catalogers recover only 15-20 cents on the dollar via liquidators vs. 45-50 cents with package inserts and sale catalogs, payment from liquidators is much faster, experts say. Brooklyn, NY-based jobber Marimex Trading, for instance, buys merchandise outright from catalogers such as Spiegel, says Marimex president Leon Marcovich, and then resells it to stores or exports it overseas. For his part, Jim Davis, vice president of Santa Barbara, CA-based apparel book The Territory Ahead, arranged with liquidator Apparel Design Zone to be paid for merchandise within five business days after handing it off. With sale catalogs or inserts, the payoff can take weeks.

“It’s a solid avenue for cost recovery,” agrees Sean Linn, former vice president of inventory management and manufacturing for now-defunct cataloger Fulcrum Direct. The children’s apparel cataloger turned to a liquidator after filing for bankruptcy in July 1998.

Using liquidators has other advantages, proponents claim. For instance, selling to liquidators is “invisible” to customers, unlike the sale book option. Catalogers that rely on sale books can dilute their brand by promoting bargain prices to customers who have paid full price, or they may even “train” customers to wait for the discount book rather than to order from the regular-price catalog.

And outlet stores have a smaller payoff than liquidators. Linn says that a cataloger’s typical recovery rate from a retail outlet is 10%-about half that of a liquidator. “Places like Marshall’s want quantity, and most catalogers don’t have that quantity to liquidate,” says Joan Litle, of Chelmsford, MA, consultancy The Catalog Connection. Consequently, they can’t negotiate the higher rates that liquidators, with their masses of product from numerous catalogers, can.

Indeed, Karen Hughes, inventory manager at Chicago-based apparel cataloger Barrie Pace, says liquidators are a good source when “you’re down to those last 30-40 units of apparel that you just can’t move. Rather than storing the merchandise in a warehouse, we turn to a liquidator.”

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