For toy companies, diversification has meant selling a variety of popular products--some for girls, some for boys; some for tots, some for older children; some in the lower price range, some in the higher price range.
One of the ways a company diversifies, is by completing an acquisition of another company. JAKKS Pacific, located in Malibu, California, is a company that uses this strategy.
“Following acquisitions, we work to ensure maximum profitability and often consolidate operations and liquidate excess inventory,” explained Genna Goldberg, JAKKS Pacific’s Director of Corporate Communications. “We may have excess inventory in a warehouse that we want to consolidate, which could include closeouts, discontinued product and current merchandise, all of which we need to clear out.”
JAKKS learned about NAEIR, the National Association for the Exchange of Industrial Resources, located in Galesburg, Illinois. NAEIR accepts donations of overstock, slow selling, and discontinued product from U.S. businesses and redistributes it to schools, churches, and nonprofit organizations nationwide. The companies that donate, earn an above cost federal income tax deduction that can be up to twice the cost of the goods.
“Often the Communications Department identifies charities and other groups in need, while Operations, Licensing, Sales and Finance work together to allocate and account for product donations,” adds Goldberg.
NAEIR has been a perfect fit for JAKKS because of the nature of the items donated. Since 2001 they have donated items like, toys, writing instruments, stationery products, and back-to-school supplies. Items like these are very appropriate for schools and nonprofits.
“NAEIR also provided a great opportunity to clear out the product, while offering our company a wonderful tax benefit in return,” Goldberg added. “JAKKS Pacific will certainly continue to work with NAEIR in the years to come.”
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