Top 10 Factors for Selecting an
Asset Management Partner to
Maximize Supply Chain Value
Authors:
Gardner Dudley, President, Capital Assets Group for Liquidity Services
Tom Burton, Executive Vice President, Federal Sector for Liquidity Services
Brian E. Thompson, Vice President, Americas for Liquidity Services’ Capital Assets Group
LiquidityServices.com
Table of Contents
Introduction.............................................................................................................. .Page 3
Superior Service........................................................................................................Page 4
Superior Scale............................................................................................................Page 6
Superior Results........................................................................................................Page 8
Conclusion...............................................................................................................Page 10
Page 2
Introduction
Two decades ago, an underserved market was ripe for transformation. Pressured
to continually improve and innovate their core businesses, organizations let
billions of dollars of surplus and idle assets lie fallow within their reverse supply
chains. With most reverse supply chain processes decentralized, reactive, low
visibility and low tech, organizations were missing opportunities for substantial
value through superior surplus asset management strategies.
Today, industry leaders understand that the reverse supply chain can and
should be optimized as a core business function to fully capture the value that
exists within every surplus asset across their enterprises. They seek innovative
strategies to maximize total supply chain value by optimizing recovery, improving
productivity, and enhancing sustainability initiatives.
The reverse supply chain presents your organization with enormous opportunities
for value: For every $1 invested in a surplus asset management program, your
organization can expect to receive $31 in return1. Yet asset management
is a non-core business, and your organization may lack the time, resources, or
expertise to handle it internally. Your smoothest path to achieving desired results
is through partnering with the right provider.
1
Source: Investment Recovery Association
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Top 10 Factors for Selecting an Asset Management
Partner to Maximize Supply Chain Value
Superior Service
1. Leverages Metrics and Marketing Strategy Best Practices
Your asset management partner must be able to continually measure and report on its performance. This entails the
partner’s overall performance – top-performing partners typically experience above-average market share, growth, and
financials – and the results it achieves for clients.
Look for an asset management partner that measures performance in these areas:
Increased Investment Recovery
• Measured by higher returns on surplus sales as compared with previous program
Supported Zero-Waste and Sustainability Initiatives
• Measured by number of items redeployed or resold and amount of scrap deferred from landfills
Increased Efficiency
• Measured by cost savings generated through redeployment and by time saved on asset management
Improved Operations
• Measured by cost and time savings from standardizing asset management processes and by how processes
mitigated risks and avoided negative outcomes
Metrics Used in Analyzing Buyer Behavior
Sourcing Information
• What web traffic resulted from your marketing efforts?
• What was the lead source for the buyer?
Demographics
• Which buyers visited the online auction page?
• Where are the buyers located?
• Are these active buyers?
Auction Engagement
• How long did the buyer stay on the page?
• Did the buyer click for additional information (e.g. specifications, pictures, videos, terms and conditions)?
• What other assets did they view or previously purchase?
• Did they bid or purchase?
Industry Comparison
• How does this item compare to other similar items for sale across all industry websites?
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Top 10 Factors for Selecting an Asset Management
Partner to Maximize Supply Chain Value
Your asset management partner should regularly report its activities and results, provide annual reviews, and host regular
meetings to keep you apprised of how it is measurably impacting your organization. As best practices and market conditions
evolve, your partner must continuously explore opportunities to improve your program.
Since effective marketing helps maximize recovery, be sure to evaluate your partner’s marketing strategies, tactics, and
tools. Is your partner leveraging best practices to understand, reach, and influence buyers? If not, you could be leaving
recovery on the table.
Providers can also increase recovery by leveraging marketing data to target the most qualified buyers. Your partner should
analyze relevant data and use these findings to craft customized campaign strategies for your surplus. It should monitor
results throughout the campaign, adjusting its approach as needed to maximize recovery.
Carefully observe how the provider collects buyer metrics (see table below) and how it applies this data to create best
practices for maximizing recovery. After every sale, analyze the reports your partner provides. Do the reports support
transparency and accountability? Do they contain the data needed to measure program success? Merchandising is an
important factor for providers selling surplus through online auctions. Your provider can maximize recovery by including
accurate, comprehensive descriptions and photos for all assets up for auction. This information gives bidders confidence in
item quality, increasing the likelihood they’ll buy. For certain high-value assets, your provider should produce a short video
demonstrating that the asset works. Videos can increase final sales prices four to seven percent.
Merchandising is an important factor for providers selling surplus through online auctions. Your provider can maximize
recovery by including accurate, comprehensive descriptions and photos for all assets up for auction. This information gives
bidders confidence in item quality, increasing the likelihood they’ll buy. For certain high-value assets, your provider should
produce a short video demonstrating that the asset works. Videos can increase final sales prices four to seven percent.
2. Drives “Green Initiatives” and Sustainability Programs
Most leading organizations have sustainability programs in place. Partnering with a vendor that supports your zero-waste
goals and green initiatives will enhance your overall sustainability efforts. Ask the provider for case studies that illustrate
its ability to help clients meet sustainability goals. A qualified provider will have online marketplaces to connect buyers and
sellers, extending the life of surplus and idle equipment and inventory. It should also have strategies to defer scrap material
from landfills.
It’s also important to align your organization with a partner that’s committed to corporate social responsibility. You can trust
this type of provider to operate with integrity, understanding its larger role in environmental and community stewardship.
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Top 10 Factors for Selecting an Asset Management
Partner to Maximize Supply Chain Value
3. Provides Solutions to Mitigate Compliance and Ethics Risks
Your asset management partner must be able to protect your business and reputation from all risks associated with
managing and selling surplus assets. Look for a partner that integrates into your program to ensure you comply with
international trade, data privacy, financial, health and safety, and all other applicable regulations and procedures.
Data privacy should be a compliance priority in the reverse supply chain. Ask your provider how it mitigates data and
information security issues, including:
•
•
•
•
•
•
Unintended disclosure of data
Hacking or malware
Payment fraud
Insider information breach
Physical loss of non-electronic documents
Loss of portable and stationary devices
Other critical compliance areas are buyer vetting and trade compliance. Your partner should have controls in place to ensure
your assets are never sold to inappropriate buyers. Look for a provider that can verify buyer identity and credit information,
ensure buyers provide end-use certificates for sensitive assets, and screen all buyers against global restricted-party lists.
Additionally, many countries have laws restricting sales within specific asset categories or to certain countries, individuals,
and entities. Your provider’s buyer agreements should require compliance with all applicable export controls and economic
sanctions regulations, giving you an extra layer of protection.
Superior Scale
4. Seamlessly Meets International Business Needs Through Global
Operational Footprint
Global organizations need global coverage. By partnering
with a single global asset management provider, your
organization can standardize and implement best practices
for asset management across all locations, resulting in
operational improvements, cost savings,
and maximum recovery.
By partnering with a single global
asset management provider, your
organization can standardize and
implement best practices for asset
management across all locations,
resulting in operational improvements,
cost savings, and maximum recovery
An effective global service provider will have local and
regional coverage in many countries to support your global operations. This coverage allows your provider to understand the
local market, buyers, language, laws, payment processing, taxes, and import/export regulations.
Your partner should also provide a dedicated account manager to ensure you receive the coverage and attention you need.
By holding recurring meetings, providers can make sure your goals are clearly communicated, measured, and fulfilled,
ensuring a successful ongoing partnership.
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Top 10 Factors for Selecting an Asset Management
Partner to Maximize Supply Chain Value
5. Offers Robust, Wide-Ranging Services
Another important element of scale is the provider’s ability
to deliver comprehensive solutions. While some providers
offer niche or component solutions requiring you to partner
with multiple vendors and affiliates to manage different
asset categories or geographic locations, your partner
should offer complete solutions tailored to your business
requirements.
Your partner should provide a full list of services and
success stories to back them up. It should also tailor
solutions to meet your unique needs. Its solutions should be
scalable, ensuring you have the level of support currently
required and the ability to scale up (or down) as needed.
Sample Service Offering
•
•
•
•
•
Surplus Asset Management
Asset Discovery & Valuation
Asset Recovery Planning
Surplus Asset Redeployment & Sales
Preparation
Surplus Asset Inventory Recovery
6. Maximizes Recovery Through Multiple Sales Methods
Online auctions let you reach the most possible targeted
buyers, making it the most effective channel for maximizing
recovery. An experienced provider, however, should
recognize that every asset and situation is different, and
implement the right marketing and sales strategy for
each sale.
An experienced provider should
recognize that every asset and
situation is different, and implement
the right marketing and sales strategy
for each sale
For assets with limited demand, there are alternatives to
online auctions. With the sealed-bid method, bids are received in response to an invitation-to-bid and kept private from
other bidders. In the negotiated sale method, the provider reaches out directly to prospective buyers. Your provider should
leverage these and other sales methods as appropriate.
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Top 10 Factors for Selecting an Asset Management
Partner to Maximize Supply Chain Value
7. Offers Redeployment Solutions
Your provider should be able to facilitate internal redeployment and swiftly sell surplus that isn’t redeployed. A qualified
provider will have proven systems – people, processes, and tools – in place to support your asset management process.
Web-based asset management software provides you with a clear, comprehensive view of all surplus across your global
locations. This software allows you to identify underperforming or idle assets and make value-based decisions to redeploy
or sell them for maximum recovery. By reducing costs and time spent on asset management, the software enables efficient,
continuous asset management and generates value to improve your forward-flow business.
By reducing costs and time spent on asset management,
asset management software enables efficient, continuous
asset management and generates value to improve your
forward-flow business
Superior Results
8. Is Viable, Experienced, and Professional
The reverse supply chain industry is fragmented, full of small, local vendors. Select an experienced, professional provider you
have confidence in. At minimum, make sure your vendor is financially healthy and stable. If the company is publicly traded
and has been around awhile, that’s even better.
Evaluate your provider’s management team. Does it have the experience and skill to support your long-term success?
What are its proven methods to maximize value in your reverse supply chain? Request meetings with company leadership,
marketing leadership, and account management personnel to answer these questions.
Your partner should provide proof points that demonstrate its experience optimizing the asset management programs
of organizations like yours. Ask for case studies on successful sales and partnerships with clients in your industry or with
similar asset categories.
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Top 10 Factors for Selecting an Asset Management
Partner to Maximize Supply Chain Value
9. Has Buyer Network to Maximize Return
A provider’s buyer network helps it maximize recovery for
your surplus. More qualified buyers equals more bids and
higher recovery.
Liquidity Services surveyed over 130 asset management
professionals from a wide range of industries with capital
assets. 25% of respondents identified recovery/price as
the top selection criteria for their surplus asset
management provider. Only 18% felt a provider could
offer anything more valuable than recovery.
Organizations are looking for maximum recovery for their
surplus – and a vast, targeted, and diverse buyer network
helps deliver this.
Often providers will claim that their marketplaces have a certain number of bidders. Examine this number – are they
counting active bidders only or everyone who’s registered? If a provider boasts of 2 million buyers but 70% have never
bid, the figure is significantly less impressive. Find out if the provider’s bidders have been qualified (e.g. cleared on terrorist
watch lists, have good credit). Selling your surplus to buyers who don’t pay or use the item for illicit activities is worse than
not selling it at all.
Also consider the provider’s buyer retention rate. The higher the retention rate, the better the provider’s marketplace
experience and the more likely you are to gain the recovery you desire. Finally, analyze your provider’s buyers by asset
type. If you’re selling surplus assets in a wide range of categories, make sure your provider’s buyer base has appropriately
varied purchasing interests. Ask your provider for recent sales results of assets in your categories to see how the quantity of
bidders and bids stacks up to competitors’.
10. Invests in the Future
Is your provider committed to developing long-term client relationships and continuously improving performance? Does
it align with industry best practices to optimize results? Ask for references of current clients similar to your organization,
and speak with them to get their perspectives on these questions. Your organization needs a partner that is invested in
innovation and committed to industry leadership and continuous improvement.
A partner that is truly committed to your business will also provide more comprehensive services that help build a better
future for your organization. Your provider should “get” your business and offer complete value-added solutions that closely
align with your needs and goals.
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Top 10 Factors for Selecting an Asset Management
Partner to Maximize Supply Chain Value
Conclusion
Your organization’s surplus isn’t a burden – it’s an opportunity to add tremendous value and fuel achievement of key
business goals. Since asset management is a non-core business function, your easiest path to optimizing your reverse
supply chain is through partnering with the right provider.
This white paper was designed to help you understand all key issues and support due diligence efforts involved in evaluating
surplus asset management providers. Selecting a provider that meets the criteria detailed here – by providing better service,
scale, and results – will ensure your asset management program runs just as effectively as your core business.
About Liquidity Services
Liquidity Services (NASDAQ: LQDT) is the leader in managing surplus across the globe to maximize return, more efficiently
and more strategically. No matter the type of surplus asset or where it is located, we optimize and execute surplus
management strategies to achieve your business goals. We are the industry innovator, leveraging insights from over 500,000
annual transactions and $1 billion in annual sales proceeds to continuously pioneer a superior model for managing the
reverse supply chain. With Liquidity Services, you have a partner who maximizes the total value you can expect for your
surplus – higher recovery, more efficient processes, simplified and consistent operations, global coverage, lower risks,
sustainable solutions, and service from people you can trust to deliver results. Learn more at LiquidityServices.com.
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Top 10 Factors for Selecting an Asset Management
Partner to Maximize Supply Chain Value
Authors
Gardner Dudley serves as President for Liquidity Services’ Capital Assets Group, which includes Liquidity Services’ awardwinning marketplaces Government Liquidation, GoIndustry DoveBid, Network International, and TruckCenter.com. As the
top executive for the Capital Assets Group – which provides surplus asset management and investment recovery services
to organizations with extensive capital investments in equipment and machinery – Gardner’s team is shaping the way that
surplus capital assets are managed, valued, and sold. In this role, he is furthering the company’s ability to meet client needs
for superior service, scale, and results while expanding and unifying its capital assets business.
Gardner joined Network International in 2000, as a start-up, to sell energy surplus and helped turn it into a profitable
business. Gardner has continued as the energy marketplace’s senior leader, following its acquisition by Liquidity Services in
2010. Over his long tenure with the company, he has led the marketing, sales, and operations teams and has been involved
in corporate development efforts. Since 2009, he has hosted Network International’s Annual Energy Insight Conference,
which attracts leading oil and gas companies to learn about investment recovery best practices. Prior to Liquidity Services,
Gardner worked in investment banking and finance for the oil and gas industry. Gardner obtained his BBA from the University
of Texas at Austin and is a member of the Independent Petroleum Association of America (IPAA). He also serves on the
board for the Texas and Southwestern Cattle Raisers Association and chairs the board of directors for the Chinquapin
Preparatory School.
Thomas B. Burton serves as Executive Vice President, Federal Sector for Liquidity Services. In this new role, Tom manages
the Company’s account relationship with the Department of Defense (DoD), ensuring superior delivery of service and
results. He also provides leadership for selected new business opportunities in the federal sector. Tom has been a member
of Liquidity Services’ senior management team since 2001, dating to the inception of the company’s DoD relationship. Most
recently, he has served as President, Capital Assets Group where he oversaw the integration of the company’s DoD business
operations with its commercial capital assets organization and the acquisition of the company’s GoIndustry DoveBid
marketplace. Under his leadership, Liquidity Services dramatically expanded its industry coverage, service offerings, buyer
base, and global footprint while delivering award-winning service to DoD.
Tom has been a central leader for the company since the procurement of its exclusive contracts with the DoD for the
management and sale of surplus and scrap assets. He built a scalable asset recovery program for the DoD capable of
processing 10,000 new auction items per week and 20 to 30 million pounds of scrap metal per month. Tom has applied this
knowledge to benefit Fortune 1000 companies looking to optimize their reverse supply chains.
Prior to joining the Company, Tom served for a decade as the Western Region Director of EG&G Technical Services, a
government contractor. Tom obtained a bachelor’s degree in Business Economics from Cameron University and is a
member of the National Auctioneers Association and the Certified Appraisers Guild of America. He is quoted often in
industry publications, providing expertise in managing, valuing, and selling surplus capital assets, and volunteers as a charity
auctioneer to help raise funds for valuable causes, such as the Wounded Warrior Project.
Brian E. Thompson, CPPM, CF, serves as Vice President, Americas for Liquidity Services’ Capital Assets Group. In this role, he
serves as a critical point of contact between the Company and clients across the Capital Assets Group, ensuring that asset
management and disposition projects are properly implemented to reach the client’s investment recovery goals, reducing
total supply chain costs in the process.
Prior to Liquidity Services, he was the Vice President of Solutions, Strategic Markets at Sunflower Systems. He was also
previously a Vice President of Sales at AssetSmart, where he achieved record sales for the company, and the Director of
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Top 10 Factors for Selecting an Asset Management
Partner to Maximize Supply Chain Value
Communications on the board of directors for the National Property Management Association (NPMA), where he won the
NPMA Presidents Award in 2011. Brian frequently authors thought leadership pieces in The Property Professional publication
and has earned an Article of the Year Award. Brian earned a master’s degree in Business Administration and a bachelor’s
degree in Management from Pepperdine University and is a former faculty member of the UC Berkeley Haas School of
Business. He also holds two certifications from NPMA: CPPM (Certified Personal Property Manager) and CF (Consulting
Fellow). In his free time, he serves on the board of advisors for Reid’s Gift, which assists teens and young adults with special
needs in Southern California, and on the board of directors for Train 4 Autism, a group that raises funds and awareness for
national and local autism non-profits.
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