Where is Excess Stock going?

We have talked about what excess stock is and where excess stock is from in my latest article, let's talk about: where is excess stock going?

We have summarized the following methods of dealing with excess stock. First of all, there are two main subjects who deal with excess stock: (sub)terminal manufacturers and traders, which have different ways of dealing with excess stock.

For (sub)terminal manufacturers:

1. Destroy

It involves usually categories of excess stock: the first one is the stock that can't be used, sold or transformed, which will occupy the space and easily corrode and cause pollution; the second one is the stock that is related to commercial secrets, once it is in the hands of competitors, there will be unimaginable consequences, so these two stocks will be destroyed.

2. Return (original distributors)

This is the same as our daily life: when we buy too many things, we can return some of them and get the refund at the only cost of the freight, and this way we can minimize the loss. In the same way, the best way to deal with the excess stock due to production reduction is also to return it to the original distributor (at a reduced price), because the original distributor may be able to resell to other clients or even return it to the original manufacturer, so as to minimize the loss. But remember, the sooner you deal with the excess stock, the better. The quickness of return determines the amount of money back.

3. Consign (independent distributors)

The simplest way is to package all excess stock and sell off, so that we can quickly cash out and return the funds. Generally, it is through the independent distributor bidding or quoting a whole package, quoting a percentage of the original price of the stock.

A popular international practice to maximize the remaining stock value: independent distributors consign. Generally speaking, OEMs have fixed independent distributors as their suppliers, and also choose an independent distributor as their surplus stock consigner. There are various ways, including designate the price, share the profit, consign, etc.

4. Own solution

When we can't return or find a distributor to consign, it's also good if we can use it ourselves. Sometimes the excess stock becomes useful with a few modifications in specifications. However, in most cases, only a very small amount of electronic parts can be used in other projects. In addition, we can also consume excess stock by using it in newly designed products.

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For traders:

1. Resell

Traders usually have a large number of clients, so they can resell the excess stock which is not damaged in terms of quality and appearance to the clients who need it

2. Cannibalize and replate

For those parts that have no other use for the time being, cannibalize if they are partly useful, replate or smelt if they can't be split.

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Generally: return to port and scrap

1. Returned to port

Due to the specificity, it requires customs supervision when handling bonded stock. Returned stock, after the customs write-off, can be offset against the amount of raw materials imported by the company, reducing unnecessary tax costs. In addition, approved by the Customs, company can apply for scrapping if they give up the processing trading goods.

2. Scrap

This is the last choice for manufacturers and traders. When the excess stock becomes waste, we can sell it as scrap, everyone understands that this is the worst way!

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Any excess stock, message me or go to our website: https://www.icsuperman.com/