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Licensee that expected to write-off the inventory
Problem:
A licensee of two internationally-known sportswear brands had over 4000 pieces of merchandise that were each 3+ years old. Adding to the
problem was that while one brand carried significant name recognition, the other had little name recognition in the US. Neither brand was know
for products in this category. Further, so as to not disturb international distributor sales, sales were limited to the US and Canada. While the
licensee ultimately wanted cash for the merchandise, they were more concerned with selling price than the timing of funds. The licensee had been
unable to sell these products through the licensee’s distribution channels or through traditional liquidation channels.
Solution:
We used our Placement Program, taking the products to multiple electronic auction marketplaces.
Result:
We used our market knowledge to first build brand awareness in the marketplace and establish a market "value" for the products. Once we had
established the brand in the marketplace we used our market timing knowledge to steadily increase volume while maintaining price performance.
Once we had reached "maturity" in the marketplace, we employed some cutting-edge auction theory from Dr. Charles Plott. The result was a
60% improvement in performance for the combination of historical sell-through and price performance. Additionally, we brokered bulk
transactions to smaller retailers when the channel appeared non-existent to the licensee. The net result was that we realized revenues for the
licensee whe the licensee had expected to write-off the inventory.
