Consumers are tightening their purse-strings and the drop in spending has sent Woolworths and MFI to the wall. On the plus-side, though, this is leading to a boom in stock being sold for a fraction of its value — great for bargain hunters.

Here we look at where these goods end up and how to net the best deals.

AUCTIONS

Many companies that go into liquidation sell their stock and equipment at auction.

Simon Charles Group (simoncharles-auctioneers.co.uk) helps insolvency practitioners sell the merchandise of companies that have gone under. It has recently sold goods from the collapse of MFI and Ilva, the furniture chains. It also sells excess and returned stock from 12 major high-street retailers, including Marks & Spencer, John Lewis, Debenhams and Harrods.

Goods are sold to the highest bidder — the vast majority without reserve, meaning huge discounts can be achieved — typically 70%-80% off the retail price.

“We work with a famous London jeweller and its goods are worth anything from £5,000 to £50,000, so there is a reserve here, but most items — from an iPod or mobile phone to a three-piece suite, sat-nav or wine — have no reserve,” said chairman and auctioneer David Rothwell.

Last week, for example, it sold a Sony Vaio laptop, worth £700, for £100; De Beers diamond stud earrings, worth £4,000, for £900; and a contemporary oil painting, worth £450, for £30.

Stock goes under the hammer twice a week at its auction house in Ashton-under-Lyne, Greater Manchester. However, about 35,000 people have signed up to bid via its auction webcam. If you aren’t able to log on during the auction, Simon Charles will make commission bids on your behalf. There is a one-off £5 administration fee and a £100 refundable deposit. There is a “buyer’s premium” of 15% on each lot.

Auction News (auctionnews.co.uk) provides details of auctions and UK company insolvencies. A web subscription costs £35 a year. The next Simon Charles auction will be held on Wednesday.

STOCK CLEARANCE

Self Trading (selftrading.co.uk ), a trader of surplus and liquidated stock, buys consumer products — everything from clothing and footwear to jewellery and electrical items — from firms in the UK and overseas then sells them on for double the price — either to individuals or traders.