Manufacturers inevitably find themselves holding onto machinery and spare parts that are no longer relevant—whether that’s due to rapid product life cycles, shifting customer demand, or outdated component specs. Obviously, they want to get rid of indirect goods that they no longer need. How should you think about the return on investment that can be realized through an excess inventory reduction initiative?
The biggest misconception about idle inventory is that the only value to be gained is a one-time cash infusion from liquidation. In reality, the economic and strategic advantages of a well-structured investment recovery program stretch far beyond the immediate proceeds from a sale.
Below, we’ll explore how an end-to-end approach to asset recovery addresses three critical ROI drivers—cutting carrying costs, freeing up internal teams, and maximizing cash returns—and why focusing on all three can make the difference between simply offloading industrial surplus and unlocking hidden profit.
The True Cost of Idle Inventory
At its most basic, the problem of idle assets is deceptively simple: MRO procurement needs to hold spare parts that sometimes are never needed, and manufacturing lines change as products change. The often invisible carrying costs of holding onto that surplus often total far more than many businesses realize. In fact, various studies estimate the annual carrying cost for inventory can hover around 20–25% of the item’s original value. Put simply: a $100 spare motor costs your company $20-25 per year to hold on to.
At Amplio, we’ve heard our clients estimate that their carrying costs run from anywhere as low as 10% to an eye-watering 35%.
Why so high? Consider everything from the physical space (leasing more warehouse square footage), to insurance fees, to the risk of product obsolescence. If those parts become outdated, the company faces not only lost value but potential disposal or environmental compliance costs as well.
For manufacturers operating on tight margins, the cumulative effect of warehousing and maintaining dormant inventory quietly erodes profits, leaving less capital available for R&D, facility upgrades, or expansion.
1. Reducing Inventory Carrying Costs: The Hidden Win
Carrying costs are often the single largest slice of the ROI pie when it comes to asset recovery. It’s also why focusing on more than just liquidation proceeds matters so much.
Enterprise manufacturers carry tens of millions (if not hundreds of millions) of dollars worth of machines and the parts need to run them on their books. If $10 million of those parts are slow-moving or obsolete (SLOB), then the company is incurring carrying costs of $2 to $2.5 million per year by not getting rid of them. The sooner you move out inventory and assets that you no longer need, the sooner you realize those significant cost savings.
A sophisticated asset recovery partner not only helps you offload that inventory quickly but also manages the end-to-end logistics—finding the right buyers, repurposing or redeploying assets when possible, and clearing them from your balance sheet. In essence, the best partner helps you move quickly, efficiently, and compliantly so that you immediately recognize the benefits of lowering your carrying costs.
By moving quickly, you can:
- Free up warehouse space: This may reduce the need for additional leased facilities or let you reallocate space toward active, revenue-generating products.
- Avoid hidden overhead: Insurance and security costs drop when you no longer need to protect unnecessary stock.
- Prevent future write-offs: When excess inventory lingers too long, it risks outright disposal or near-worthless liquidation if technology advances.
By quickly freeing yourself of these routine carrying costs, you gain a healthier balance sheet and fund more strategic initiatives elsewhere.
2. Freeing Your FTEs: Reclaiming Your Most Valuable Resource
Next to cost savings, employee time is often the most valuable commodity in any organization. Yet, in many manufacturers, dealing with surplus and obsolete inventory is a hodgepodge process, delegated to an already overcommitted team.
Without a dedicated asset recovery function, you risk pulling skilled employees off critical tasks—engineering, production optimization, or quality improvement—so they can handle spreadsheet wrangling, buyer negotiations, and shipping arrangements.
For enterprise manufacturers that have excess spread across tens or even hundreds of sites, the process becomes a complex time-suck.
By bringing in a specialized partner (like Amplio), you can hand over the entire process and:
- Save 1–3 full-time employees (FTEs) worth of workload
- Let your in-house experts focus on future-focused efforts, not the lower-value task of moving old stock
- Unburden your supply chain teams from administrative headaches like listing, order fulfillment, and tracking
In short, the opportunity cost of tying up your best people thinking about how to sell used machinery can be far larger than you think. Transforming that overhead into fresh capacity for core business operations can be a game-changer.
3. Maximizing Cash Return: The Tangible Bonus
Of course, at the end of the day, a cash infusion from asset recovery still matters. But it’s most powerful when viewed as one piece of a bigger ROI puzzle.
A data-driven approach uses market insights to determine how, when, and where your excess assets should be sold. Rather than dumping everything at a rock-bottom price, a skilled partner can segment your inventory. That means value-dense items—specialty parts, for instance—might sell for a higher percentage of their original cost, while lower-value stock gets moved efficiently to clear warehouse space.
- Typical gross returns for typical MRO equipment fall in the range of 2–4% of original asset value.
- Niche or high-demand items can sometimes net returns of up to ~10% (or higher for the best electronics)
Amplio’s preferred method of working with enterprise manufacturers is to partner with them over time so that we can maximize total value for our clients. We immediately clear their warehouses and balance sheets so that they minimize carrying costs, but then we sell inventory over time in the channels that will maximize cash recovery. We share the profit — so our clients get lower carrying costs, freed up employees, and a great cash return.
Compared to big industrial liquidators who often offer ~1% of asset value, this approach can significantly beat the baseline and contribute a healthy chunk of capital back into your organization.
Looking at the Whole Picture
When you visualize the full ROI of asset recovery, you start to see a three-tier structure:
- Eliminating carrying costs—often the largest numeric value
- Saving FTE hours—an immediate productivity and morale boost for your core team
- Generating revenue—the “cherry on top” that further strengthens your bottom line and can be reinvested in procurement and the supply chain
If you’re only focused on cash returns, you miss out on calculating the substantial capital you save (or reallocate) by slashing overhead and labor. That’s the real key to a modern approach to asset recovery: shifting the conversation from quick liquidation to holistic ROI.
A Look to the Future of Asset Recovery
Today’s supply chains are increasingly lean, data-driven, and flexible—which makes large piles of slow-moving stock a real liability. Manufacturers that proactively manage their inventory lifecycle (rather than reacting late in the game) stand to gain:
- Financial agility: Fewer overhead burdens and more liquidity
- Operational efficiency: Less wasted space and time on non-core tasks
- Competitive edge: The ability to reinvest in product innovation or scale with new market demands
Thinking of asset recovery as a strategic initiative to get out ahead of — rather than an afterthought — will only grow more critical in an environment where margins are tight and customer needs evolve rapidly.
Asset Recovery as a Strategic Enabler
It’s easy to think of asset recovery strictly in terms of short-term machinery liquidation proceeds. But leading manufacturers recognize that the real ROI comes from cutting hidden carrying costs, freeing up employees for higher-value work, and then adding a final layer of cash return on top. When you combine all three, you transform what could have been a cost center into a powerful boost to your organization’s agility and growth.
Most manufacturers aren’t equipped to move quickly or efficiently on proactive asset recovery — they simply don’t have the teams or the expertise.
If you want to realize the full ROI of clearing out excess inventory, reach out to us! Our investment recovery services are designed specifically to partner with and help enterprise manufacturers cut costs, free their teams, and unlock capital from underused inventory.
