Product Lift Out
A producer of batteries was able to gain shelf space in a national hardware chain by agreeing to buy out its competitor’s inventories, at full value, which were already displayed in the chain’s stores. This was an expensive proposition involving several millions of dollars of batteries and accessories.
The battery producer’s main challenge was to identify a means to dispose of the competitor’s inventory in a profitable way possible. After considering all their options the battery producer made a decision to recoup the entire expense by using a trading strategy and selling the competitor’s inventory for Trade Credit.
Using this approach, the producer was able to knock out a major competitor, avoid the costs normally associated with lift out programs and as an added bonus, reduce the cash needed to run his operations by millions of dollars through Trading rather than selling for cash liquidation.
The TC was used to partially pay for in store marketing costs, LTL and Full Truck load transportation costs, an outdoor billboard campaign, and Ocean freight containers.