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Written from the buying side — what actually decides how much you recover

Excess disposal rarely goes wrong loudly, which is part of what makes it awkward. Value tends to slip away quietly — through timing, through what the stock is expected to fetch, and through the fact that in most companies the job does not sit neatly with anyone.

This is written from the buying side. We price excess lists every week, and it seemed worth setting out what we tend to see, in case it is useful to anyone weighing up what to do with stock they no longer need.

• Offers tend to be based on what a part is worth today rather than what it originally cost — which is usually why a number comes as a surprise.
• Date codes matter more than most people expect. Buyers often grow cautious around three years and many prefer to stop at five, so waiting can cost more than it recovers.
• Disposals stall inside the business more often than in the market — usually a write-down nobody wants to sign, and a task that sits with no one in particular.

In our experience the smoothest disposals are the ones started soon after it becomes clear the parts will not go into a future build — rather than when the warehouse runs short of space, or at year end, or when somebody finally has a free week.

Holding on tends to cost in four ways at once:

The last one is easy to overlook, and it is probably why waiting tends not to pay.

Excess is often bought during a shortage — at the top of the market, at prices nobody would pay today, because at the time the alternative was a stopped line. Understandably, the original invoice becomes the thing to measure against, and that is usually where expectations and offers begin to diverge.

Here is an example of a case we see fairly often, with the numbers rounded off because it is an illustration rather than a rate card. A part was bought at $3.00 each during a period of scarcity. The company hopes to recover a quarter of that, so $0.75. The shortage has since passed, replacements have arrived, supply has normalised, and the part now trades at around $0.50. An offer of $0.25 arrives.

Measured against the $0.50 the part is worth today, that is a reasonable offer. Measured against the $0.75 the company had in mind, it looks a little far away — and that expectation was a modest quarter of cost, not an unreasonable one.

What often follows is a stand-off that suits nobody. The seller holds on, reluctant to let good stock go for less than they had in mind. At the other end, the buyer the offer came from has priced against the current market, knows the number is a fair one, and moves on to something else — and the demand that made that price possible does not always wait.

Often the offer is fair. It is the comparison that makes it look otherwise.

We have deliberately not put a typical percentage here, because there is not one. The expectations we come across run from five per cent of original cost to a hundred, and what a line actually fetches depends on the part, its condition, its provenance and what the market happens to want. A single figure would probably do more harm than good.

What tends to help is not a percentage at all, but a change of reference point: where you can, check what the part is worth in today's market and judge the offer against that, rather than against what it cost in a different market some years ago.

A natural response to a disappointing offer is to hold on and see whether the market recovers. In practice that does not often happen, and waiting introduces a second issue that has nothing to do with price: the date code keeps ageing.

Buyers tend to grow more cautious around three years from the manufacturer's date code on the label, and a fair number prefer not to take stock beyond five. These are not rules — every company sets its own tolerance and it shifts constantly — but it is the broad picture we have gathered over the years.

That is the wider market rather than us. Our buyer network reaches places where older date codes remain perfectly saleable, so we are happy to review stock of any age. Age affects what a line is worth; it does not decide whether it is worth sending.

So waiting can work against you twice over: the price does not come back, and stock that was simply cheap becomes stock that fewer buyers will consider. Holding out for a better number often ends in a lower one.

Two things tend to hold excess disposals up, and neither is really about the parts.

The first is the write-down. Inventory is carried at cost, so selling below that books a loss, and nobody volunteers to be the person who signs it off. That is entirely understandable — it is a visible number with someone's name against it.

It may help to separate two things, though. A write-down is when a loss appears in the accounts, rather than when it happened — if the market moved a year ago, the value went then, and carrying the stock at cost keeps the number tidy without keeping the value. A sale changes the form of the position more than the position itself: stock becomes cash, which is the one thing it cannot do while it sits on a shelf.

The second is that it tends to be nobody's job in particular. Reviewing excess, listing it, checking quantities, chasing date codes and getting pricing approved is a real piece of work, and in most companies there is no one whose role it is.

So it usually lands with someone already fully occupied, and it slips. The disposals that do get done tend to be the ones a senior person has pushed, by making it a named person's task for a defined period.

A long internal approval chain has much the same effect. If pricing sign-off needs three people, an offer can go stale before it reaches the third, so it is worth knowing at the outset rather than after a number has been quoted.

That is part of why we try to keep our side of it light.

We can often bid on a list as a single lot, so the awkward low-value material leaves with the rest rather than staying behind. We arrange and pay for collection, worldwide. Payment usually reaches you before the stock leaves your site. And there is a named trader on the other end rather than a form. The less work it takes to get to a number, the more likely the job gets done.

In most cases there are only three things at your end: send the list, agree a price, and have the parts ready for collection. We take care of the rest, and the full sequence is set out here.

Most delays come down to the same few things, and they are usually easy to sort out before sending.

Photographs help too, and they are lighter work than people sometimes expect. A shot of the full label is plenty — there is no need to hunt for particular fields, since everything we need can be read from the label itself. They are useful from the start if you have them, though they can just as easily follow later: they are not a prerequisite for a quotation or for a deal, and a handful of example lines is usually enough.

None of this is a barrier to getting a number. If time, systems or access make any of it difficult — or you are simply not sure what you are looking at — please do send the list as it stands and we will work from there. A rough list that gets sent is worth a great deal more than a tidy one that never does.

The principle is straightforward: if a line costs more to ship than it will realise, it is scrap. Nobody pays more to move a part than the part is worth — at that point they would simply buy new.

The difficulty is applying it without a number in front of you. A good deal of material gets scrapped on the assumption that it is worthless, without having been valued first.

Prices do surprise people. Parts written off as junk turn out to be in demand, and a handful of lines can recover real capital from a pile that looked like a disposal cost.

“Sorry, we scrapped all that last month.”

That is something we hear fairly often, and it is usually followed by finding out what a few of those lines were worth. A valuation can take minutes — longer for a big list — and costs nothing either way.

Scrapping is the one step in this process that cannot be undone.

It is also worth saying that you do not have to choose between selling everything and selling nothing. Lists can be priced line by line or taken as a single lot, and both have their uses.

Line by line lets you pick out the parts with real value. Taking the lot sometimes suits companies better, because the cheap and unsaleable material goes with the deal rather than remaining your problem once the good lines have left. Which works better depends on whether you would rather maximise the number or simply be finished with it.

Plenty of the lists we price have been out in the market for a while before they reach us. That is not a reason to hold one back — please send it anyway, and we will price what is there.

The dynamic is worth understanding, though, because it shapes how any buyer reads a list. Good parts, with clean ownership history, at sensible price expectations, tend to move quickly. So a list that has been circulating for months tends to be approached a little more cautiously, whatever is actually on it.

If you are early in the process, that is an argument for approaching a few buyers you have reason to trust rather than everyone at once, and going back to them if the first answer disappoints. If you are not early, it is simply context.

Either way, none of it is a reason to accept the first number you are given, and none of it is a reason not to ask.

If it helps to reduce it to four things: decide early, judge offers against what a part is worth today rather than what it cost, send manufacturer part numbers in a clean column, and get a valuation before anything is scrapped. Do those and you give yourself the best chance of the strongest number the market will bear — most of the value lost in excess disposal goes to delay and to the wrong reference point rather than to the market itself.

Before you send a list

• Decide as soon as it is clear the parts will not go into a future build.
• Use manufacturer part numbers rather than internal ERP or stock-system codes.
• Keep the part number in its own column rather than inside a description.
• Check quantities against the warehouse where you can.
• Include date codes where your system holds them — and say so where it does not.
• Note packaging condition — sealed reels, opened, part-used, loose — and where the stock sits.
• Photograph a few full labels if you have them. A sample is enough, and they can follow later.
• Find out who needs to approve pricing before an offer arrives.
• Ask for a valuation before anything is scrapped.

So the offer is not a surprise

• An offer measured against today’s market, not against what the stock originally cost.
• No typical percentage. Expectations we encounter run from five to a hundred per cent of original cost. What a line actually fetches depends on the part, its condition, its provenance and current demand.
• An itemised offer, typically within 48 hours, for a full list or selected lines.
• Line by line, or often the whole lot — whichever suits you. Where a lot bid works, the low-value material leaves with the rest.
• Older date codes still reviewed. Age affects what a line is worth, not whether it is worth sending.
• Collection arranged and paid for by us, worldwide. Payment usually reaches you before the stock leaves your site.
• No obligation to accept, and nothing shared without your consent.

If you are holding excess at the moment, our page on selling excess electronic components sets out what we buy and how the process works, or you are welcome to send a list using the form below.

Hopefully that sheds some light on what makes the difference to what you recover. If you have other questions, our FAQ covers the ones that come up most often — and for anything else, general or about a particular list, you are very welcome to email us at hello@quanta-source.com.

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