How I-Cap Converts Excess Stock into Cash

Salesfloor and warehouse clutter restricts cash flow and hampers product updates.

You know how it goes: You buy six high-end projectors in order to earn a price cut from the manufacturer. (After all, how else can you work out a margin these days?)

Over the the next 12 months, you sell five of them. For another five months, that sixth projector just sits on a shelf in your warehouse until you finally decide to liquidate the stock, selling it for quarters on the dollar.

This liquidation of stock — or "inventory recapitalization" as Richard Frank of Frank Marketing Associates prefers to call it — is vital to any business.

“You want to get rid of it,” Frank says of old equipment. “You want to turn it back into cash and put it back into your company.”

But how? That’s where I-Cap comes in.

Inventory Recapitalization

I-Cap, short for “inventory recapitalization,” is a business that specializes in liquidating the excess equipment inventories of CE manufacturers and dealers.

Started by Matthew Santa Maria — former marketing manager for Infinity Speakers — I-Cap auctions secondary inventories on eBay using a “tried and true” method of listing and promoting.

Dealers and manufacturers with excess inventory send Santa Maria their products. He puts together an online sales package, puts them up for auction and acts as administrator of the sale and collections process. I-Cap collects a percentage of the final sales price.

After successfully running his eBay business for a number of years, Santa Maria eventually partnered with Frank, a former colleague at Infinity.

Santa Maria has made nearly 6,000 eBay transactions on behalf of manufacturers and dealers “without a single negative response,” Frank says. “eBay is a powerful tool. There are techniques that work, and we’ve become quite [an] expert at it.”

Nervous Sales Can Mean Secure Futures

Frank is very forthright about some of I-Cap’s challenges — namely, hesitant sellers. “There’s a nervous topic here,” he says. When it comes to liquidating secondary inventory by selling it on eBay, he says, many manufacturers and dealers bite their nails.

“Folks have to have the right mindset going into this. This is sort of the last-ditch effort to recoup the money on these things [excess overstock]," Frank says. “When you’re dealing with the liquidation end of business, it’s not a time for false expectations.”

Frank believes that not only can I-Cap garner a significant percentage of the value on the goods being auctioned, but that it’s well worth it in terms of business management.
“The cost of unsold goods ties up more than just BOM [bill on materials] costs,” he says. “Add in costs of storage, shrinkage, lack of cash flow and the costs really add up.”

Taking those old products and turning them back into cash enables businesses to reinvest, Frank says. It also frees up salespeople to sell the new stuff.