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Core components of Liquidation's business model

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1 What are the core components of Liquidation's business model?
2. Do you think Liquidation will ultimately succeed or fail? Why?
3. How has Liquidation (and similar online services) impacted the travel services industry?

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Solution Summary

The expert examines the core components of liquidation's business models. Whether liquidation will ultimately succeed or fail is determined.

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The online auction site of Liquidation.com is a business to business (B2B) site that offers
retailers and other small to large businesses as means of purchasing inventory well below
original costs. The site is innovative, in that it focuses solely on large lots of goods, rather than
single items like those that may be found on eBay and other online auction sites. While other
sites may offer larger lots, they also target home shoppers and individuals who wish to buy and
sell items.
The value proposition of liquidation.com is the low cost for which items can be
purchased. For those businesses that sell odd lots of goods or overstock products, purchasing
products in this manner can be less costly than through traditional suppliers. In addition,
buyers can reduce the amount of time spent searching for the right types of products to
purchase and resell (Steinfield, 2002). The value proposition for sellers is that the site and its
auctions provide a means for otherwise un-purchased stock to be sold. Not only does the seller
benefit from additional revenues, but can eliminate the need for warehouse space as well.
The auction site "enables its corporate and government sellers to enhance their financial return
on excess assets by providing a liquid marketplace and value-added services that integrate sales
and marketing, logistics and transaction settlement into a single offering" (liquidation.com,
2010). Buyers eliminate the expense of supply chain activities to acquire additional stock and
can select only those lots with quantities they ...

Solution provided by:
Beatrice Martino, MEd
Education
  • MEd, Jones International University
  • BSc, DeVry University
  • MPH, Walden University
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