For years, returned merchandise was generally viewed as a headache for both the seller and the buyer. But innovative thinking combined with a desire to find a profitable opportunity in an otherwise money-losing proposition has put a lot more focus recently on reverse logistics.

One company in particular, Liquidation.com, a commercial division of Washington, D.C.-based Liquidity Services, Inc., has hit on a compelling business model that has become a turnkey solution for bulk, surplus asset disposition, says president Jaime Mateus-Tique.

"The goal is to provide a complete and comprehensive solution for any corporation or government agency that wants to outsource a part or the entire process of surplus asset disposition. The important success factor of our company is that we have understood that this is a service, not a technology solution," he says.

Technology does figure significantly in the company's operations, however. Liquidation.com's online auction matches up sellers and buyers, giving sellers a way to convert surplus property into cash and buyers an efficient means to source a wide array of products. Liquidity Services, Inc. and its subsidiaries complete 10,000 bulk sale transactions monthly.

The auction site has become quite popular for the company's buyers, explains Asad Haroon, vice president of marketing. "Almost sixty percent of our active buyers visit our site every day-we're a great source for surplus," he says.

The company also is the exclusive partner of the U.S. Department of Defense, and is responsible for the storage and sale of over $4 billion of original cost surplus property per year across the United States, Puerto Rico, and Guam.

Although the company has no problem finding buyers for damaged or used merchandise, "a lot of what we sell is new-overstocks," says Haroon.

Another reason for the company's success is its ability to provide a complete menu of services for its sellers. "We have put together a series of integrated services to meet the requirements of each client, each seller," says Mateus-Tique. "This comprises the management, shipping, marketing, collection of payment, and also warehousing of product. We have relationships with Con-Way Logistics as well as ReturnBuy for their reverse logistics services," he adds.

In addition to their partnership with Con-Way Logistics, Liquidation.com works with other service providers to meet the needs of their clients. "We have dedicated fulfillment managers here in Washington, D.C. who select the right service provider and are able to integrate their services in a seamless way with our services," says Mateus-Tique. "Our relationship with Con-Way Logistics encompasses warehousing and logistics services. As for shipping, we have different service providers who are fully integrated into our backend."

While Liquidation.com strictly concentrates on the B2B sector, ReturnBuy services both B2B and B2C. "We are a bulk disposition service rather than a consumer oriented retailer," notes Mateus-Tique. "What we do is very much adapted to large quantities. We are able to receive truckloads of goods and then sell by pallets. It's a different business than retail where you have to handle consumers, non-professional buyers." He adds, "We believe these businesses have to be separated. Ultimately, the entire chain of [players] from the surplus generator to the final user are better served if you have specialized channels."