Reading Retail’s Tea Leaves Via Retail’s Resale Market

Given the massive and in many cases seismic shifts in the retail landscape because of the coronavirus pandemic, it shouldn’t come as much of a surprise that retail’s shadow side of B2B overstock sales and liquidation is also rapidly shifting.

Demand for things that are often common and easy to find in large resale lots for inexpensive prices — home goods and appliances in particular — has skyrocketed.

‘We’re seeing some really interesting dynamics happening with shifting supply and demand,” Howard Rosenberg, CEO of B-Stock, a liquidation platform, told Karen Webster in a recent conversation.

From the macro-position of B-Stock’s business, he noted, the shifts have been myriad and complex to address; but they are not at existentially threatening thus far. B-Stock has spent 11 years building a large and diverse buyer base in terms of both vertical and geographies served such that “any weakness in one area is pretty well absorbed about by the others,” Rosenberg noted.

But for the small- to medium-sized business (SMB) buyers on the platform, Rosenberg said he is genuinely worried and fairly sure that a good number of the businesses on the platform today aren’t going to survive.

“What’s heartening about the whole thing to a small extent is we’re seeing some really interesting and sort of gritty innovative actions on the parts of buyers to figure out how things like changing what they buy so that they can be considered an essential business and thus not have to be shut down,” Rosenberg said, noting that for some of their SMB resellers that has meant adding grocery items or household essential items to their product mix so they can stay open and operational.

Although the business of liquidation and reselling is about to see a lot of such short jumps, what is even more interesting, he noted, is the new shape and direction of the market as a whole setting up in the background.

Keeping the System Moving Now

The impact to material flowing through B-Stock’s platform has been interesting, Rosenberg said, because its broken down to two basic, nearly diametrically opposed strategies for dealing with the crisis at hand and the unusual inventory build-ups that have resulted.

Some businesses, he said, finding themselves largely shut down in the real world, he noted, have shifted to an eCommerce model with a very “all hands on deck” mentality, and largely pressed pause on anything that isn’t keeping that effort moving forward. Those retailers have simply stopped taking returns in most cases and extended the return period for customers holding things they wish to send back. From those retailers, the flow of goods to B-Stock has largely fallen back to a trickle, although one that will likely very rapidly reverse like a blast from a firehose when those firms open back up, and the returns backlog starts flowing in like a wave.

Other firms, he noted, facing a buildup of inventory because of the economic ice age that set in overnight, have gone into hard triage mode and are actually flooding B-Stock’s marketplace with inventory in an attempt to make ready for the eventual re-opening process.

“So, what we’ve seen in some cases is clients coming and saying, ‘Hey, we have all this inventory. We’ve got to do something with this. Can you guys help us just liquidate it directly out of the stores instead of bringing it back to a distribution center and doing it the way we normally do it?” And in the cases where we’ve seen that, I can’t name names, but one of our clients that fits that bill this month has increased its inventory shipment to us 700 percent.”

It is a pivot B-Stock has been able to easily move alongside, expanding access to logistics service providers directly through its platform. B-Stock, Rosenberg noted, in its earliest incarnation was a simple marketplace to let overstock buyers and sellers easily connect, but the logistics of actually moving the goods was the seller’s issue to solve once the deal was struck. Over the years, what the company has increasingly moved toward is bringing logistics partners into its ecosystem such that buyers can more quickly and easily take possession of goods and convert that into sales.

That decision, he noted, is paying off today but will likely pay off more acutely tomorrow as the new commerce marketplace’s new form takes firmer shape.

Designing A Digital Future

When will the end be here? Rosenberg noted he only wishes he could catch a glimpse of the future, since it would make so much of his life easier. But at this point, there are simply too many variables still in play to make any kind of concrete guesses.

But when it does end, he said, the marketplace isn’t going to be the same.

“The bigger fundamental structural shift, I think, that we’ll see is an acceleration of the adoption of eCommerce,” he said. “With everything that has happened and with so much of commerce going online, I think a fair bit of that will stick online because people, I think, are going to realize, ‘Hey, that was actually pretty convenient.’”

Although the current economic catastrophe is different in many ways than the previous one in 2008-2009 that B-Stock first launched in, one commonality, Rosenberg speculated, will be a resurgence in interest in the resale market. It was about a decade ago that the stigma of being something “used” fell away as consumers became more enamored with purchasing “refurbished” goods as an efficient way to buy top-of-the-line at a lower price.

Economic boom times, Rosenberg noted, led consumers back to a preference for new, but he suspects the resale market will come back as consumers are beginning to work through the economic recovery.

He said he suspects the overstock, resale and refurbish market will be a busier place when this is all over — although it will be a different one with different kinds of sellers working to appeal to an emerging class of buyers.

“I think we are going to see holes in the market appear, but what has become equally clear over the last few weeks is whenever they appear, something appears to take up the slack,” he said. “And it will be interesting to watch where those ideas go next.”