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Many industries face the problem of disposing of unwanted stock. We studied a mailing from a nonprofit — NAEIR (National Association for the Exchange of Industrial Resources) — that accepts unsold inventory and distributes it to schools, churches, and other institutions that serve needy people.
The letter suggested that donating would help corporations “avoid problems with liquidators.” The problems were not further described.
Some years ago, I accompanied an executive from a Chicago manufacturer of children’s soft drinks as he witnessed a bulldozer destroying a few hundred cases of his company’s products. I asked this man why they could not have donated that product to schools in low income districts, and he explained that they could never be sure that such a donation would not end up in the wrong hands.
Apparently the problem with liquidators is that not all of them could be trusted to handle the product in a constructive manner. Some promise to ship the product to a distant nation overseas, but it is not easy to verify that the promise has been kept.
We saw one case where a luxury product that had been marked for destruction was instead stolen and then moved to a flea market. The moral of the story is that the disposal of unwanted inventory must be closely supervised.
NAEIR was founded by Norbert C. Smith, the former president of Capital Recovery Company, a consulting firm that arranged donations of capital equipment and buildings to schools and non-profit organizations.
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