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Managing Returns, Surplus: A Win-Win-Win Situation

Apparel Magazine,  Jordan K. Speer 2/1/2006

From the middle, Via Trading offers small and large apparel businesses a way to clear out unwanted inventory or stock up on much-needed merchandise. You’re a large national apparel chain, ready to bring in your new 2006 summer line. Problem is, returns and other unsold winter merchandise are clogging the warehouse. What do you do? Enter Via Trading. The Los Angeles-based company buys returns, overstocks, surplus goods, closeouts and liquidation items from major retailers and manufacturers and sells them wholesale at what it describes as very, very good prices to small retailers, discount shops, eBay resellers and other secondary channels, including outlet stores in international markets.

Jacques Stambouli, founder and CEO of Via Trading, says that apparel and footwear comprise approximately 40 percent of its sales, which totaled $7.5 million in 2005, up from $2 million in 2003 and $4 million in 2004. Returns comprise approximately 75 percent of Via Tradings merchandise, and about 4 percent to 6 percent of all U.S. retail sales, he adds. Projecting sales of $12 million this year, Stambouli says he attributes the rapid growth of his company to the huge, untapped niche of small and discount retailers that don’t have a good, steady, reliable, well-priced source of supply.

Via Trading’s 65,000-square-foot warehouse is open to the public, with minimums as small as one case or one pallet, depending on the merchandise, which runs the gamut from Oakley to Def Jam to Tommy Hilfiger. Usually if [a small retailer] wants to buy something nice and in small quantities because it cant afford to buy 1,000 dozen, its not going to get a good deal, says Stambouli. The only way you can get a good deal is by buying it on the secondary market, and this is a niche that’s not well served. For the big guys, Via Trading offers a solution to the problem of unwanted merchandise, by

  1. freeing up valuable space in warehouses, distribution centers and stores;
  2. paying for the merchandise, albeit pennies on the dollar;
  3. and removing the merchandise in a manner and to a location that suits the retailer or manufacturer.

For example, it cuts out the labels of all of the apparel it purchases from Abercrombie & Fitch. Via Trading also arranges all of the logistics to pick up and haul away merchandise. Its not exactly a profit center for [retailers and manufacturers]. Its more of a loss minimization or cost control, says Stambouli. Click here to read the article on www.apparelmag.com

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