Inside Business: A masterclass in selling old stock

Roger Trapp talks to a company that specialises in remarketing

WHEN the computer firm Wyse Technology decided to refocus its business, it faced a problem: how to get rid of old products without devaluing those with which it wanted to continue.

Its answer was to call in PST, a company active in an important field known as re-marketing. Manufacturers, retailers and their intermediaries in a variety of sectors are increasingly turning to it as a way of reducing stockpiles.

With pundits increasingly convinced that the UK economy is in for a period of little growth, if not actual recession, it is expected that the demand for such a service will escalate. After all, the disappointing Christmas trading period experienced by many retailers showed how stocks can quickly build up to levels that are not easily reduced by traditional new year sales.

But John Meredith of Maidenhead-based PST says that demand for remarketing is high whatever the economic conditions. In recent years, that has been increasing because of the much-commented-upon pace of modern business.

Computer companies, like Wyse, are particularly susceptible to this as a result of the constant upgrading of features brought about by intense competition between manufacturers. And a good number of PST's client companies are in this sector.

In Wyse's case, the issue was what to do with the stocks of personal computers that the company had as a result of deciding to pull out of that part of the market.

Mark Jordan, vice-president for the company's European operations, says: "We didn't want product being dumped in the market with our name on it."

After PST had come up with a number of options, the two organisations agreed on which countries and which areas Twyford-based Wyse did not mind its discarded products being sold to and whether or not they should be sold with the company's name on them. The most important thing, he says, was ensuring that the company did not face a situation where customers had been offered stock more cheaply than would normally be the case.

But Mr Meredith says that has long been true of the computer industry is starting to affect other sectors, too. At the same time, the increasing emphasis on branding means that companies are loath to cheapen what they have so assiduously built-up by constantly offering some products at deep discounts.

The result is a demand for a service that companies will not typically perform themselves but out-source to companies such as PST. In some cases, the solution to overstocking is simple - for example, selling out-of- fashion lines of clothing to countries where consumers are less fashion- conscious.

But in the computer market, for instance, it is not just a case of selling PCs in countries where they are less freely available, but finding different applications for equipment. Something that might have very little retail value can perform a useful function in a factory, Mr Meredith adds.

Another solution in the computer field might be to bundle a collection of products into a package so that the branding is disguised and the price of each element is difficult to assess.

What re-marketers always bear in mind is that, while protecting the brand and established distribution channels are vitally important, companies do not call in a remarketing specialist unless they are looking to recover assets. And then the issue becomes time.

"If there's only a couple of days to go before the year end and a massive inventory of redundant stock is going to be an embarrassment on the books, then a quick cash sale is the answer," says Mr Meredith. "But given a little time, it is always possible to engineer a higher return."

One of the growing methods for improving returns is corporate barter - basically, a means by which a company swaps its stock for something it might want, typically advertising space or travel. Sometimes, companies do the swaps directly, but in the United States, in particular, intermediaries are growing up in a business that is worth about $8bn a year.

Whatever the route taken, the key is to be decisive. As Mr Jordan points out, management wants to liquidate stock. The longer it prevaricates, the more the price offered goes down.

"It's a tough decision to make," he says.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?