While the market is consumed with searching for parts, data-driven excess solutions provide a way for you to vent excess inventory and gain ROI.
The electronic components market is hot right now. Severe shortages are putting pressure on buyers to focus only on meeting their immediate needs. But while the shortages continue, don’t overlook your excess inventory.
Buying strategies that might make sense during the shortage — like securing safety stock or stockpiling — can have the unintended consequences of building up your inventory far beyond what you need. Moving this excess inventory can free up storage space and clear the way to ROI. The key to this strategy is using data-driven excess solutions to identify the best opportunities for resale.
Identifying your data needs comes first
There are lots of independent distributors out there offering data-driven excess solutions that focus on maximizing your ROI. The question, however, is do they have the data you need? Whether their data is useful to you or not depends on your market position and the responsiveness of the system that your distributor utilizes.
You are looking for unique access to rich, current market data that gives you better visibility. In today’s global market, finding a source of global information that is updated daily by a wide number of professionals yields a real-time snapshot of what a part is today. Also, look into the customer base where this information is coming from. You might want to see if the customer base includes multiple tiers or different commodities depending on what your needs are.
The volume of operations is an important factor as well. If your independent distributor is fielding thousands of requests daily, you’re much more likely to find a buyer. Some distributors may tout their software as a key differentiator. We’ve found that, as a practical matter, a deep knowledge of an up-to-date, highly specialized in-house system provides more value than just operating the latest software.
Advantages of data-driven excess solutions versus a quick sell
Forecasting isn’t top of mind in the current market when inventory is hot. But we all know this won’t last forever. Longer-term, you want to use a data-driven solution to provide forecasts, market visibility, and additional new insights to inform your decisions. An experienced partner will have the historical data in place to help you improve ROI for your excess. Identifying historical trends for particular parts provides context for your pricing and helps create consignment strategies.
Evaluating your inventory for long-term value opportunities versus looking for an immediate sell can offer an opening to a partnership. Building a partnership now versus looking for a one-time opportunity to sell means that you’ll be primed and ready to move when the shortage cycle inevitably cools down.
To summarize: When faced with excess components, you don’t have to go at it alone. You can save time and hassle by partnering with a reliable distributor and use their data to your advantage — but make sure it is the data you need.