🇦🇺Australia

Inventory Shrinkage in Liquidation

3 verified sources

Definition

Auction processes for obsolete stock involve high risk of theft or loss, especially low-value parts ($100-$10,000 range), with no statutory warranties amplifying disputes.

Key Findings

  • Financial Impact: AUD 5,000-20,000 per auction event in shrinkage (1-2% of liquidated value)
  • Frequency: Weekly auctions
  • Root Cause: Manual inspections and on-site bidding without real-time tracking

Why This Matters

The Pitch: Wholesale Motor Vehicles dealers in Australia 🇦🇺 lose AUD 10,000-50,000 yearly to auction shrinkage. Automation of tracking and digital title verification eliminates this risk.

Affected Stakeholders

Auction Coordinator, Dealers, Liquidators

Deep Analysis (Premium)

Financial Impact

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Current Workarounds

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Obsolete Inventory Write-Downs

AUD 20,000-100,000 per year in holding costs and write-downs for mid-sized wholesalers (2-5% of inventory value)

GST Errors on Liquidated Stock

AUD 2,220 base penalty per BAS error + 25% shortfall penalty (ATO standard); 20-40 hours/month manual reconciliation

Delayed Accounts Receivable Payments

AUD 3,000 per average invoice tied up (30+ days); collections agency fees post-7 business days overdue; storage fees for delayed delivery (e.g., 7+ days at reasonable rate)

AR Collections Agency Costs

Collections agency fees (typically 10-20% of debt value) after 7 business days overdue; e.g., AUD 300-600 on AUD 3,000 invoice

Storage Fees from AR Delivery Delays

Reasonable storage fees per vehicle (7+ days, e.g., AUD 50-200/day based on industry norms)

Core Charge Return Warranty Disputes

AUD 5,000-20,000 per major dispute; 2-5% of parts revenue in refunds/rework

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