Partstat Excess Inventory Solution FAQ
Ensuring that the critical electronic components on your bill of material are readily available is an important element of any successful obsolescence management strategy, but it is not the only element. Equally important is the ability to easily transition from one product lifecycle to another without taking on added burdens caused by excess inventory.
Not only can excess inventory waste limited warehousing space and rack up 25-30 percent of its value in inventory carrying costs, but once it is sold on the open market through a lot bid or other means, it’s not uncommon for OEMs to discount the inventory by 95 percent or more. OEMs have long realized the inefficiencies of traditional excess inventory selling models, but without an alternative solution, such losses have largely been written off as “the costs of business.”
This is why, in addition to obsolescence management strategies such as BOM Monitoring and Part Search designed to preserve a product’s lifecycle on the front end, Partstat also offers a comprehensive Excess Inventory Solution that allows OEMs to regain their investments once the product lifecycle is completed.
In this article, we are going to address a few of the most common questions we receive regarding our unique solution, and how it might play a vital role in OEM supply chain processes moving forward.
1. How does the Excess Inventory Solution work?
When the time comes for customers to rid themselves of excess inventory, they send Partstat a copy of their excess inventory list. From this, our team compiles a free excess inventory analysis that identifies the market status for each individual part. Should our Big Data reveal a favorable market where a high rate of return can be expected, Partstat will then handle all shipping costs as the customer sends the inventory to our ISO-certified facilities for inspection and storage. Once this is completed, our team gets to work implanting a comprehensive marketing strategy designed to maximize inventory exposure across Partstat, over a dozen paid industry sites, and all major search engines. Up until the the inventory is sold, we handle every aspect of the selling process from storage, to shipping, to marketing, all the way (should it be needed) to a final lot bid.
2. How much does it cost?
Until the inventory is sold, the customer is not charged for any aspect of the solution! Partstat handles all packing and shipping charges, and we use our own facilities to store all of the excess inventory identified in our excess inventory analysis until a buyer is found. Once the inventory is sold, Partstat will take a commission negotiated with the customer at the beginning of the process. In other words, if we can’t sell the inventory, we don’t charge a cent!
3. How do you determine how much to sell the inventory for?
We are the world’s largest free electronic component search engine and marketplace, and as a result, we have access to over 50 billion points of Big Data. This provides us an unparalleled real-time view of the market for over 23 million electronic components and semiconductors from over 5,000 manufacturers, and from this, we can provide, in our free excess inventory analysis, a current average market price. But in conjunction with our comprehensive marketing strategy, we leverage this Big Data to take advantage of the state of the market by encouraging competition to push the price — and the customer’s rate of return — even higher.
4. How long does it take to sell the excess inventory?
Time is of the essence when selling excess inventory, and we act immediately to capitalize on what our Big Data is telling us. As a result, the vast majority of the excess inventory sold through our solution has a fairly quick turnaround — usually a few weeks to a month. In some cases, we have had inventory sell before we have even received it!
5. Is there a term limit associated with the Excess Inventory Solution?
There is no limit to how long we can store the inventory! The program ends when either the inventory sells, or the customer wishes the program to end.
6. Can you facilitate a lot bid?
Yes! Although we do not recommend starting with a lot bid due to the expected low rate of return, in the event a customer wishes to end the program, we will facilitate a lot bid on their behalf. Before moving straight to a lot bid, give our marketing strategy an opportunity to show you how much it can recover!
7. Is there a way customers can view the inventory and its progress?
Yes! All customers receive full access to an online dashboard where they can view excess inventory sales and, if needed, request inventory transfers.
8. Where can I request a free excess inventory analysis?
Just click here, fill out the required information, and one of our team members will contact you! Once we have received your excess inventory list, we will immediately begin compiling your free excess inventory analysis. The turnaround time is typically two or three business days.