Peter C Evans
Rich Bulger Manufacturers need innovative solutions to manage excess inventory as tariffs and other disruptions make it harder to forecast demand accurately. Traditional liquidation methods often result in low recovery values, channel conflicts, and environmental concerns. A promising alternative is the "pop-up" circular marketplace. This is a temporary, managed digital platform designed to facilitate the resale and redistribution of excess inventory directly from manufacturers to selected buyers. By adopting pop-up circular marketplaces, original equipment manufacturers (OEMs) can regain control over pricing and brand image, promote sustainability, and unlock greater financial value from surplus goods. These tailored marketplaces can be set up more quickly and effectively than many companies realize.
OEM "Pop-Up" Circular Marketplaces
A pop-up circular marketplace is a temporary, curated digital platform designed to facilitate the resale of excess inventory - such as products or parts - directly from manufacturers to selected buyers. The inventory in these marketplaces is focusing on excess stock, overstock, returned items, or refurbished products held by OEMs. This approach can be applied in a wide range of sectors including IT equipment, auto parts, medical devices, and much more.
Technology and business model innovations are enabling a more agile approach to marketplaces. These innovations have made it possible to boost resale efficiency and enable these temporary platforms to overcome traditional logistical and remarketing challenges. This approach also advances the principles of the circular economy, which emphasize extending product life cycles, reducing waste, and maximizing resource efficiency.
Factors Leading to Excess OEM Inventory
Many factors can cause excess inventory.1 Forecasting methods can fall down and overestimate market demand. Examples include assuming that historical trends will hold or failing to keep pace with political changes that impact the business environment. Internal data silos between departments like sales and operations can exacerbate misalignment. Unexpected shocks like the COVID-19 pandemic dramatically intensified these challenges, as lockdowns triggered erratic demand spikes (e.g., electronics) followed by sudden drops, leaving OEMs with surplus stock. Shipping delays during this period also prompted precautionary overordering, further inflating inventories.
Escalating tariff wars have compounded the problem by forcing OEMs to rush orders to beat deadlines, absorb higher costs, or hastily reshore production - often miscalculating demand across markets.2
Seasonality mismanagement, rapid technological obsolescence, and supplier-driven bulk purchasing (fueled by discounts or "just-in-case" manufacturing) further contribute to overstock. In short, geopolitical tensions, economic instability, and regulatory changes add layers of unpredictability, distorting purchasing patterns and rendering historical data unreliable.
Traditional Liquidation Channels
Traditional liquidation methods for managing excess inventory include bulk sales to wholesale buyers, discounted sales through retailers, physical auctions, and partnerships with liquidation companies. While these channels can help OEMs offload surplus stock quickly, they come with significant downsides. Recovery values are often low, with buyers typically paying just 5-20% of the retail price. These methods also limit control over pricing and branding, risking reputational damage if products appear in discount marketplaces or non-compliant regions. The process itself can be inefficient, involving prolonged negotiations, administrative burdens, and uncertain outcomes, such as unsold inventory.
Additionally, steep discounts may undermine primary sales channels, creating conflicts with distributors and eroding customer trust in pricing fairness. Hidden costs, including fees for liquidation services and logistics, further reduce net returns, while ethical concerns arise if products end up in landfills or unauthorized markets, conflicting with sustainability goals. Finally, traditional liquidation struggles to handle high-volume or specialized inventory, often leaving niche or seasonal items stranded. Modern alternatives, such as cross-channel liquidation strategies and AI-driven dynamic pricing, offer more efficient, higher-margin solutions while preserving brand integrity.
All too Common Informal Practices
In many OEMs, the default method for liquidating inventory still relies on informal tools - namely, email and Excel lists.3 These workflows may seem efficient on the surface but often lack any formal compliance controls or auditability. Offers are submitted with no clear tracking of who made them, at what price, or when. This opens the door for subjective decision-making, pricing inconsistencies, and even unethical behavior.4
These practices persist in part because email and Excel are familiar, low-friction tools - and because the idea of implementing more structured processes and digital tools for resale has traditionally been associated with high costs, long timelines, and IT complexity. Many organizations assume that building a secure, trackable, and curated liquidation platform would require enterprise-level investment.
Adding to the complexity, it's not uncommon for different teams within the same OEM to have their own liquidation processes - each with separate buyer networks, pricing practices, and approval paths. One team may work with brokers, another may use informal auctions, and others may quietly move excess stock through long-standing personal relationships. This fragmentation creates inconsistent outcomes, undermines central oversight, and makes it nearly impossible to ensure a fair and compliant process across the organization.
"Pop-up" circular marketplace
A pop-up circular marketplace is a temporary, curated retail or digital space designed to help manufacturers resell excess inventory - such as products or parts - directly to selected buyers. Unlike traditional liquidation channels or broad marketplaces, a pop-up circular marketplace is carefully controlled by the manufacturer, who selects which products to offer and curates the buyer base. This ensures quality, protects brand reputation, and targets buyers who value the products. This concept aligns with circular economy principles, which focus on extending product lifecycles, reducing waste, and maximizing resource efficiency.
The 'pop-up' aspect refers to the marketplace's temporary nature, often set up for a limited time to quickly liquidate surplus inventory or test new resale strategies. These marketplaces can be physical, such as short-term retail events. There are now specialized platforms that specialize in helping brands find temporary locations. For example, Appear Here is an online marketplace that connects brands, entrepreneurs, and retailers with short-term retail spaces.5
Digital platforms can be established to operate for a defined period. By managing the resale process directly, manufacturers maintain control over pricing, presentation, and buyer selection, which helps reinforce brand values like sustainability and quality. This approach also supports circular economy goals by keeping products and materials in use longer, reducing environmental impact, and recovering value from unsold goods.
There are several benefits to this model. Financially, manufacturers can recoup costs tied up in excess inventory, improving cash flow and reducing losses. Brand protection is enhanced because the curated marketplace allows manufacturers to control how their products are presented and who purchases them, preserving brand equity. Sustainability is a core focus, as extending product life cycles reduces waste and appeals to eco-conscious consumers. Pop-up marketplaces can generate customer engagement and attract new audiences. Operationally, liquidating surplus inventory frees up warehouse space and reduces storage costs.
This concept has been applied in various industries. In fashion, brands often host pop-up shops or online events to sell overstock or upcycled products, sometimes accompanied by educational content about sustainability. In technology and industrial sectors, companies like Dell and Apple run their own outlets for refurbished or surplus products, occasionally as limited-time events. In B2B asset recovery, platforms enable manufacturers to list surplus industrial assets temporarily for resale to vetted buyers, supporting circularity in heavy industries.
Compared to traditional liquidation channels, pop-up circular marketplaces offer greater control, a more targeted buyer base, and a stronger focus on sustainability and brand experience. While traditional liquidation often involves bulk discounts to anonymous buyers with little brand oversight, the curated nature of 'pop-up' marketplaces can preserve brand value and potentially recover higher margins. Overall, a pop-up circular marketplace provides manufacturers with a flexible, sustainable, and financially sound solution to manage excess inventory while advancing circular economy principles.
Core elements for a circular pop-up marketplace
A circular pop-up marketplace for manufactured goods integrates several core elements to optimize resale efficiency and sustainability.
Central to its operation is a robust grading system that evaluates the condition of goods through standardized criteria - such as "Like New," "Refurbished," or "As-Is" - combining automated tools like AI-powered image recognition to ensure grading accuracy and speed.
It is now possible for each item to receive a digital tag - such as a QR code, RFID, or NFC chip - that tracks its lifecycle, recording origin, specifications, repair history, and sustainability metrics, often enhanced by blockchain for immutable records and real-time updates during refurbishment or repurposing.6
Disposition software acts as the logistical brain, using AI to route goods to their highest-value channels, whether primary markets (B2B buyers), secondary markets (discount retailers), or recycling streams, while optimizing geographic placement based on real-time demand.7 Pricing dynamically adjusts through machine learning, balancing cost-plus formulas (factoring in depreciation and refurbishment) with competitor benchmarking and demand surges, often offering bulk discounts or ESG-driven premiums. Market intelligence tools analyze historical sales, seasonal trends, and competitor data to forecast demand and highlight sustainability benefits, such as CO2 savings, to attract eco-conscious buyers.
The buyer vetting process involves pre-qualification portals requiring business licenses, tax IDs, and sustainability commitments, alongside reputation scoring via credit checks and transaction histories. Tiered access ensures premium buyers receive early or exclusive access to high-grade inventory. Computer vision offers major advantages for automating the grading of excess or returned inventory by enhancing accuracy, efficiency, and cost-effectiveness.8 Together, these elements create a seamless workflow: goods are graded, tagged, priced, routed, and sold to vetted buyers, with post-sale analytics refining future decisions - all within a framework that prioritizes circularity, brand integrity, and profit recovery.
Conclusion
A pop-up circular marketplace offers a compelling alternative to traditional liquidation methods for managing unwanted OEM inventory. By providing a curated, temporary platform for reselling goods directly to selected buyers, manufacturers can regain control over pricing and brand image, promote sustainability, and recover greater financial value.
With the integration of core elements like robust grading systems, digital tagging, AI-driven disposition software, dynamic pricing, and thorough buyer vetting processes, these marketplaces offer a fast and effective solution that aligns financial imperatives with circular economy principles. As businesses increasingly prioritize sustainable practices and seek innovative ways to manage resources, the adoption of "pop-up" circular marketplaces is likely to expand across various industries, driving both economic and environmental benefits.
If your company is interested in designing, building, and operating a pop-up circular marketplace, please reach out. We and the rest of the team at Capital Growth Partners would be happy to help.
Sources
1. https://hbr.org/2023/09/the-next-supply-chain-challenge-isnt-a-shortage-its-inventory-glut
4. Bulger, R. (2024). Going circular: The Evolution of Reverse Logistics into a Competitive Weapon. Reverse Logistics Association.
5. https://d3.harvard.edu/platform-digit/submission/appear-here-airbnb-of-retail/
7. https://redbeam.com/blog/the-disposition-of-assets-how-it-works-and-implications-to-know
8. https://www.inflowinventory.com/blog/computer-vision-in-inventory-monitoring/
