As promised, here’s a second post to catch up on everything that’s gone on. I’ll start by going into a little more detail about my placement, B-Stock Solutions.
B-Stock helps large Fortune 1000 manufacturers and retailers liquidate their excess inventories through a private, branded online marketplace. Normally when someone like Walmart wants to get rid of stuff they don’t want to sell in their stores anymore, they go to a traditional liquidator who charges a fixed price and Walmart usually take a steep loss. B-Stock however sets up a buyer auction so the price can be bid up and sellers can get more of their money back. The incentive for buyers is that they know whose stuff they’re bidding for because each brand has their own website.
Why should companies care about liquidation? The thesis behind the business is that liquidation is an easy way to increase profits that most companies don’t take advantage of or don’t have the resources to do so. All you accountants out there know that excess inventory is written off as a loss. However you’ll also remember that your Cost of Goods Sold are basically locked in once you’ve produced or acquired your inventory. Therefore, any increase you get on your liquidation value will go almost completely to increase your profits. If you were to focus instead on increasing profits through sales, you’ll incur additional variable costs which means its much harder to get the same profit increase by just focusing on revenue. Pretty cool concept, it just makes you wonder why no one thought of it before. For those of you who like these sort of accounting exercises, check out this post on the B-Stock blog.
During my first week at the office, I’ve jumped right into the day-to-day. The two main projects I’ve worked on so far are making sure potential buyers have the right paperwork and doing some research about the world’s 250 largest retailers. The founders of B-Stock originally ran a similar product at eBay before spinning it off on their own so a lot of the business plan has already been fleshed out. Since I’m new to the game though, I’m still trying to learn all the ropes of the company and the business. To that end, everyone has been pretty helpful about getting me oriented. The office is really spacious and pretty cool. Aside from work, there’s been some casual chatter about the state of the tech industry and the World Cup. I even got my tail handed to me in a friendly game of ping-pong. I look forward to getting more and more involved with B-Stock and leaving my mark on the company before I leave (in a good way, of course).