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Inside Outdoor | Spring 2016 50
“If we can
work with
retailers
of that product
out of their
market and
into another
business who’s
interested
that same
product,
it’s usually
good for
everyone.”
by Martin Vilaboy
BoxFox helps relieve the burden of excess inventory
An Upside to Markdowns
Markdowns can be equated
to the “bitter pill” of specialty re-
tail. They’re hard to choke down
but likely good for the overall
health of the business. Too many
markdowns, and you risk the
side effects of competing with
your own full-price inventory,
while effectively training your
customers to look for clearance
sales signs. Too few markdowns,
and it could tie up cash flow
needed to keep the lights on.
Either way, retailers’ dis-
dain for the markdown is easy
to understand. After all, the
existence of aged and surplus
inventory effectively shines a
spotlight on buying mistakes,
or at least some really bad
luck. And while no one willingly
wants to swallow the major
margin losses that come with
deep discounts and clearance
sales used to the get rid of old
inventory, letting that product
rot on the shelves only leads to
larger losses in the long run.
at’s a retailer to do? Fortu-
nately, BoxFox has come along
with a little sugar to help the
discounts go down.
BoxFox has built a platform
that gives specialty retailers ac-
cess to an on-demand pricing
tool for surplus inventory and a
private network of pre-qualified
rs looking to purchase it.
loud-based platform and
marketplace doesn’t exactly
take the sting out of margin-
crunching clearance sales, but it
does make the markdown pro-
cess quite a bit more controlled
and systematic, if not flat-out
easier to swallow.
The basic concept is really
quite simple and somewhat
familiar. Say a retailer in Ohio
ordered too many winter gloves
for the amount of snowfall
seen that winter. BoxFox can
match it up with a retailer in,
say, Colorado that is enjoying
late snowfall or a wholesaler in
Canada that knows of a retailer
having a massive winter clear-
ance sale. The retailer in Ohio
gets the inventory off its shelves
and cash to re-stock them with
the most recent product intro-
ductions, and the buyer gets to
move more gloves. BoxFox takes
its 5 percent commission for its
matchmaking service; everyone
is happy.
“If we can work with retailers
to get some of that product out
of their market and into another
business who’s interested in sell-
ing that same product, it’s usu-
ally good for everyone,” says Joe
Van Deman, director of partner-
ships at BoxFox.
The process starts with a
BoxFox retail partner upload-
ing a list of excess inventory,
typically by way of an Excel
spreadsheet or export data
from a point-of-sale system.
(There’s also a BoxFox iPhone
app whereby retailers can sim-
ply scan items on a clearance
rack, for instance, and list items
with a touch of button.) BoxFox
then takes the products’ UPC
codes, gathers information on
those products through various
plug-ins and pricing tools, and
automatically creates a listing
complete with colors, models,
sizes, high-res images, and so
forth, as well as a free appraisal
of the inventory items to give
the retailer an idea of what the
products are generating on the
open market and what they like-
ly can get through the platform.
“We try to make it very sim-
ple, where the retailer doesn’t
actually have to provide all that
information,” says Van Deman.
The appraisal also sets the
starting prices for a three-day
listing period, during which
time potential buyers bid on the
inventory. At the end of the bid-
ding process, the seller receives
information on the highest of-
fer. “Most of our offers that are
accepted are within the range
of probably plus or minus 10
percent of the appraised value”
“From the buyer’s side, it is
a bidding process, but only the
highest total offer gets delivered
to the seller,” he says.
Unlike most other wholesale
online marketplaces, the seller
is under no obligation to accept
any bids. After receiving a bid,
a retailer may decide it could
do better selling the inventory
at markdown in-store to exist-
ing customers, or maybe they
just want to use the appraisal
to make more intelligent pric-
ing decisions for an upcoming
clearance sale.
“If they mark it down to 50
percent in-store, and they still
don’t have any luck, they can
come back to BoxFox, put it up
again, and likely, we’ll be able
to pull an offer that’s similar to
what they had the last time,”
says Van Deman.