Hidden Working Capital Opportunities in Your Warehouse

For financial leaders of large retailers and brands, excess and returned inventory can be a significant drag on working capital and margin performance. With returns costs for U.S. retailers expected to reach $850 billion annually (approximately 17% of total sales) and processing costs ranging from 20% to 65% of an item’s original value, the financial impact of ineffective reselling strategies can no longer be ignored.

The traditional approach of moving secondary inventory through manual processes, task crews, and a few large liquidators is not only outdated, it also costs money every day. A recent study found that more than 40% of retailers still track resales manually, and 35% rely on liquidators for pricing, essentially ceding control of one of the most important levers for optimizing recovery. This fragmented and opaque model not only limits recovery rates, it also extends cycle times, tying up valuable warehouse space and cash that could be deployed elsewhere.

Hidden costs of inaction

Consider the following: Currently, 50% of retailers allocate 11-25% of their warehouse space to returns and excess inventory. Each day these units sit idle, they represent not only storage costs but also the opportunity cost of working capital that can fuel growth plans, reduce debt, and improve cash conversion cycles. For financial executives focused on improving EBITDA and freeing up capital, the math is simple. Faster resales with consistent (often higher) recovery rates directly lead to improved financial performance.

Here are some alarming reminders: Half of all retailers cite collection and price optimization as their top B2B reselling priorities, yet current solutions are not delivering the financial results leadership demands.

Despite this clear financial need, many finance teams are reluctant to change their B2B reselling approach. Concerns about operational complexity, integration issues, and unclear ROI are leaving retailers trapped in legacy (and inefficient) processes, even as working capital remains tied up and recovery rates remain stagnant. The cost of inaction increases every day.

A streamlined approach to recommerce

The most forward-thinking retailers are abandoning traditional resale solutions in favor of B2B recommerce platforms that treat secondary inventory as a strategic asset rather than a cost center to be minimized. When evaluating potential partners, finance leaders should look for six critical competencies.

1. Buyer demand
Access to a large network of verified business buyers across all product categories and terms is non-negotiable. More buyers create competitive tension, leading to higher recovery rates and shorter liquidation days, both of which have a direct impact on your bottom line. Think of it as creating a small market effect. The more qualified buyers competing for your inventory, the better results you will achieve.

2. Flexible resale solutions
Whether your priorities are maximizing cash recovery, organizing warehouse space, or maintaining brand control in secondary channels, your platform should support a variety of go-to-market strategies. A one-size-fits-all approach leaves room for leeway. You need the flexibility to optimize based on your specific business goals rather than vendor platform limitations.

3. Accelerated cycle time
Inventory stored in warehouses incurs daily costs such as maintenance costs, depreciation costs, and opportunity costs. Platforms that leverage competitive auction dynamics and multi-channel reselling capabilities can significantly reduce holding times, freeing up working capital and warehouse capacity for more profitable uses. The goal is not simply to move inventory. It’s about moving quickly.

4. Price and performance analysis
In an era where 43% of retailers still track resale manually, having access to real-time data on seasonal demand patterns, shopper behavior and optimal pricing is a competitive advantage. Quality analytics allows you to move from a resale approach to proactive inventory optimization that maximizes recovery on all fronts.

Find a platform that leverages AI-driven modeling and deep historical transaction data to predict recovery rates and optimize pricing strategies. This predictive intelligence transforms guesswork into data-driven decisions.

5. Brand protection and compliance
For finance leaders concerned about channel conflict or brand dilution, modern platforms provide granular control over buyer acceptance, floor prices, and channel restrictions. This allows secondary sales to complement primary retail operations rather than cannibalize them. Protect brand equity while maximizing recovery by controlling who purchases inventory, at what price, and through which channels.

6. Expert Program Management
An experienced account management team should provide data-driven reselling strategies, product listing guidance, and prompt customer support, freeing your internal teams to focus on core business operations. You don’t have to be a resale expert to run an effective recovery program.

Technology that scales with your business

The right B2B recommerce platform not only improves collection rates, but also fundamentally changes the way organizations manage secondary inventory at scale. Find solutions like:

• Reduce operational burden by automating manual processes across multiple brands and facilities while maintaining a full audit trail for your finance and compliance teams.
• AI-driven modeling and extensive transaction data provide predictive intelligence to predict recovery rates and optimize pricing strategies.
• It provides granular reporting at the SKU, facility, and category level, giving finance executives the transparency they need for accurate financial modeling and board-level reporting.
• It integrates seamlessly with your existing ERP and WMS systems and works with your current discount partnerships rather than a disruptive rip-and-replace implementation.

Infrastructure flexibility allows finance leaders to start with a pilot program in a single facility and scale to a multi-region, multi-brand operation once results are proven. Build internal buy-in with proven results while de-risking your investments.

The ROI Case for Change

For CFOs evaluating new B2B resale partnerships, the right recommerce platform transforms excess inventory from a balance sheet liability to a predictable EBITDA contributor. An efficient B2B resale platform measurably improves working capital efficiency and gross margins by reducing write-offs, accelerating cash conversion, and providing transparent performance data.

The compounding impact is that higher recoveries reduce losses, faster cycles free up capital, and better data allows for more accurate forecasts, each of which reinforces the others.

The question is not whether to modernize your B2B reselling approach. The question is whether you can afford not to do so.