WIWO
WIWO, or Walk In Walk Out is a contract option to set an Asking Price including stock, rather that the much more common Agreed Price + Stock at wholesale valuation.
A WIWO contract does not require a stocktake (extra cost) as all stock on hand is included.
Whilst the seller gains an assured price at settlement day, there are numerous things to consider.
Stock is stock, if you don’t have it you can’t sell it; and we educate buyers not to compromise the sales of the business they are taking over, by limiting the value of stock to fit a budget.
Accordingly, stock is not negotiable. However, in most cases, the Asking Price is always considered negotiable.
So if your Asking price includes stock (WIWO), you are accepting to potentially also discount your stock value to negotiate an agreed price
The wholesale value of the stock is normally assessed by an independant stocktaker the day before settlement, and that assessed value is paid for in full on settlement day by the buyer. ie, the seller gets their money back on what it cost to buy that stock.
Other factors include :-
A newsagency contract takes 3 months on average to settle. A Seller can run their stock down (no ordering) to maximise their return. As you can imagine, buyers solicitors have seen this before and so they normally reject a WIWO, or, want to stipulate a minimum value of stock to be on hand at settlement, which requires the cost of a stocktake; adding complication to what was intended to be a simple agreed price. If at that point your stock on hand is in excess of the minimum stock value stipulated, you are essentially giving that extra stock away for FREE.
From the buyers side, if selling down stock to meet a budget, the most popular lines sell first/quickly and are often not replaced. As most shops do not have shelf labels for every item, the buyer will have no idea what needs to be replaced to re-order. The result is the buyer takes over only the slow moving lines, and will struggle to maintain profit/sales without the most popular items.
At the end of the day, Newsagencies For Sale will represent your business as you instruct, and we have work-arounds we can discuss subject to what gets raised by a buyers solicitor before the contract is signed. Call your broker to discuss further.