Best Options for Remarketing Excess Electronic Components

Thus far, 2012 has been a year of few major electronic components shortages. I think we can all agree that this is a good thing for production lines. However, it also means that many OEMs and CMs are sitting on millions of dollars’ worth of excess electronic components that they might never use – which presents a significant financial risk for any company. With the fast pace of developing technology, it is critical to recover value from surplus electronics inventory as quickly as possible, before those components become obsolete.

So what can companies do to recoup at least some of their supply chain costs in an already-saturated market? Here is a brief rundown of your best options for remarketing excess inventory through a trusted independent distribution partner such as Converge:

Outright buy. Does your company need to get surplus inventory out of your warehouse and off your books as soon as possible? Perhaps the components are rapidly aging or you may even be losing additional money each month by paying storage fees to someone else. So the longer the inventory sits, the more your company stands to lose. With the outright buy option, you simply send Converge your excess inventory list. Converge’s commodity managers review the list, determine what the products are worth on the current market, and then might make an offer to buy the inventory outright. This takes the inventory out of your hands and off your books, allowing you to focus on matters that are more important. 

Consignment. If recovering the most value from your surplus inventory is more important to you than an immediate resolution is, you can consign the products to Converge. We take the inventory out of your warehouse and into ours, where we reconcile, inspect, and stage the products. Meanwhile, your company retains ownership, complete visibility, and control of each line item. Then our commodity experts put their market intelligence to work for you, scanning the globe for potential buyers. When we make a sale, we handle all the details, but your company gets the majority of the proceeds. This enables you to recover a significant amount of value from items that otherwise might have been scrapped.

Demand opportunity. The demand opportunity option is very similar to consignment in that the seller receives the full benefits and expertise of Converge’s market intelligence, operational expertise, and extensive global network. In both arrangements, your company sends its surplus list to Converge, and then we work to match the inventory to the demand that exists throughout our network. However, unlike the consignment program, Converge does not take physical possession of the inventory being sold. The products stay with their owners until Converge finds a potential buyer for them. If proposed terms and conditions of a sale are accepted, the products must come to Converge to undergo quality inspections before sales are finalized and the items are shipped to the buyers. All financial reconciliation and reporting activities are managed by Converge.

The need to remarket excess inventory will always exist, whether there is a surplus market or a stable market. Despite best-laid plans, manufacturers will end up with more parts than they need for the current demand of their products. Remember – you don’t have to be a component remarketing expert to recover the most value from your surplus inventory. You do have to partner with one.

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