Our CEO has seen just about everything as far as being a liquidator goes. Starting off as a member of NCL’s road crew fresh out of college, Michael Lunsford has been a liquidator in both the front and back of the house, so to speak, and has learned a few things along the way. By a few things, I mean just about everything a hotel liquidator could learn.
I recently had the pleasure of digging through NCL’s old KOTCH(Keeper of the Company History) files and I happened to come across an article Mr. Lunsford had written for the Hotel & Resort Industry magazine in 1994 titled “You Can Profit From The Purge”. Within that article, there is a section filled with liquidation tips in which I’ve decided to share as a part of my first blogging session for NCL:
Bring in a qualified liquidator. It should be one that is licensed and insured. The liquidator appraises your inventory and buys it from you for a guaranteed lump sum, usually double what you would take in from an auction – a market with which a liquidator should also be conversant.
Ask someone you know who’s been through a liquidation. Talk to other lodging executives; ask who they have used and if they would use them again.
Check qualifications. Get references, contact past clients and review work history. Request certificates of insurability for protection of all parties.
Allow enough time. Proper liquidation is profitable, but not if you wait too long. A typical 400-room hotel – closed down – requires 30 to 45 days.
Demand an enforceable, written contract for all services. Be ready to transfer clear title of your goods at the time the contract is executed. Be cautious of the “percentage of the gross” with little or no concrete control of additional costs you incur.
Verify the number and experience of the team assigned to your project by the liquidator. Look at the nature and method by which the liquidator values your inventory. Demand a guaranteed payment schedule including all or a portion of the amount upfront.
Find a mutually beneficial location. If possible, coordinate with your installer and liquidator in finding a location to receive both old and new items. This creates a sales location for the old FF&E, thereby resulting in a major difference in dollars to you.
Many often view a liquidation as a negative option; however, it’s crucial to see it as a positive move. The property’s value increases because you are investing in new inventory for your customers’ comfort and convenience. And you have valuable goods – sometimes nostalgic – to share with your community. Generations of wonderful memories may be locked up in your F F&E, many of which the public – your guests – may want to own.
Although, Mr. Lunsford’s article was published in 1994, the facts remain the same when looking for a liquidator. As with anything, you should always do your due diligence when checking into a liquidation firm’s experience and credibility. Again, it was so cool to look through our stock of hotel press releases, sale flyers, publications etc., dating back to the 60’s and I can’t wait to share more with all of you!