An excess stock valuation project for a UK original equipment manufacturer (OEM) involved some striking figures:

  • 5,775,157 electronic components
  • More than 600 different manufacturer part numbers
  • Millions of items requiring identification, verification and valuation

The OEM could have managed the project internally. Many businesses attempt to do exactly that. However, once the time required to identify, count, verify, value and document millions of components is considered, this approach rarely makes commercial sense.

The challenge of valuing excess electronic components

A project of this size involves much more than producing a stock list. Each part must be correctly identified and its details verified before its potential value can be assessed. It also raises several important questions:

  • Is there genuine market demand for the components?
  • Which markets and buyers should be approached?
  • What are the parts realistically worth?
  • Which potential buyers can be trusted?
  • Should the stock be sold together or divided between several buyers?

At this scale, an excess stock project can quickly become larger and more complicated than most OEMs and CEMs are equipped to manage internally.

Working closer to the market

To support the project, Stephen Clarke, Account Manager, spent a week working from Fenghuang Guzhen in China. The location placed Stephen in the same time zone as some of the world’s largest integrated circuit markets and electronic component trading centres. This allowed enquiries to be answered, offers to be assessed and decisions to be made in real time, rather than waiting overnight for responses.

Finding demand rather than trying to sell everything

The objective was not simply to sell all 5.7 million components as quickly as possible. Selling everything as a single lot would have been unlikely to achieve the best return. Instead, the project focused on identifying the parts for which genuine market demand existed and matching them with suitable buyers. On this occasion, the stock was matched with 17 different buyers. This targeted approach secured a five-figure return for the OEM.

The result

The project demonstrated that the value of excess electronic component stock does not necessarily depend on selling every item. The strongest return often comes from identifying the components with genuine market demand, establishing a realistic valuation and finding the right buyer for each group of parts. Excess inventory may appear to be little more than stock taking up valuable warehouse space. Managed correctly, however, it can become a significant source of recovered cash.

If your business has excess, obsolete or slow-moving electronic components, a professional stock valuation can help you understand where the genuine opportunities lie. There’s more information about how we can help here.