They do both, buy inventory at discounted prices and do consignment for companies....
In either case...it works out badly to have no sale / dead inventory.
Posters get excited and tout the TV / LCD sales, as they are the high ticket items..you'd have to ask them whether they think Biz is buying those units for pennies on the dollar (not likely) or if they are merely getting a consignment fee on the sale (say 30%).
I bet you get either varied opinions &/or...hmm, didn't think of that....
If the inventory is bought, the dead inventory is subsidized by the selling items...depreciates the profit on the sales.
Sure they can take a write down / off, but it is still $$'s out of their pocket.
Add in the cost of labor, handling, storage, of the dead inventory, often handled multiple times in an effort to re-market / re-sell it vs the item sold the 1st time.
If the inventory is consigned, the dead inventory again is subsidized by the selling items..
They still have the labor, handling cost associated with the selling efforts, and in the end, if they have to send the dead inventory back to the consignor.
They can't bill the consignor for items that didn't sell, they would get comp'd for the fees' and such, but not the labor and handling.
From their Statement:
"Our consignment services cost nothing unless your inventory sells."
So, in either case..handling inventory that folks don't want / dead inventory eats the profit of the good inventory.
This is where the business model works or doesn't....
If one reviews BZCN's Q record, sell through rate, continued ballooning OS....with a 5B AS I might ad....it paints a pretty clear picture...IMO.
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