Liquidations

Liquidations can happen in two types of cases.

The first and most well known is when a company is forced to liquidate because they have over-indebted themselves. In our experience, this can happen for two reasons: either the business wasn't soundly managed, or the the way that the company tried to enter the market was filled with too much debt.

The second case that is fairly abundant is when a company is trying to free up assets into cash for areas other than the original idea for the assets. For example, if a company finds that they are making more money on advertising than deliveries, they may wish to abandon their vehicles and spend more money on laser printers. In this case the goods are also liquidated, but not because the business is going under.

There is an legal process involved in liquidations from the department of justice that may be read about here: http://www.justice.gov.za/master/liquidations.html .

If interested, we recommend the following links to read up further on liquidations.

Wikipedia: http://en.wikipedia.org/wiki/Liquidation .

Engineering News on Liquidations: http://www.engineeringnews.co.za/article/february-liquidation-numbers-up-70-stats-sa-2009-03-23

Turnaround SA with statistics on SA liquidations: http://www.turnaround-sa.com/liquidations/liquidations%20statistics.php

Auctions

The problem with auctions is really to do with competition. Someone can get lucky and walk away with a bargain, but often the competition at the organized auctions is quite fierce. One example of this is what's called an auction ring.

An auction ring is a group of buyers at an auction who collude not to bid against one another in order to keep the auction price low. The items bought at the first (legal) auction are later sold at an illegal private auction (called 'knock out' auction) and the resulting profits are shared among the members of the ring. It is a criminal offense to participate in an auction ring, and the original seller has the right to annul the sale already made to a member of any such scheme. http://www.businessdictionary.com/definition/auction-ring.html

However, even normally the competition can push prices up. The advantage with goods that we sell, is that they are pre-auction, and usually at a fixed price, so the consumer does not feel the sting of prices being pushed up in auction.