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    1. DropshipDiva is offline

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      #1

      Start-Up Guide To Buying Liquidation Goods

      The main aim of doing any business, whether small or big is to make money by selling at a rate higher than the purchase price, along with the associated expenses. One of the lucrative avenues of doing business is buying and selling liquidated goods. However, in order to make money in this business, it is necessary to be alert and be able to spot liquidation inventory that is available at a throw-away price while selling it at a substantially higher price and quickly.

      The success of using liquidation stock as your resale strategy is therefore not only dependent on the type of liquidation goods you buy, but also on your ability to tap into the demand that the liquidated goods were unable to attract while on sale by the original stock owner.

      It is also important to consider that not all liquidated stock is equal. There are varying grades of liquidated stock, from brand new to damaged beyond repair. Be smart enough to avoid buying defective or poor-quality goods that might be difficult to sell.

      Liquidation Goods

      These goods originate mostly from clearance items that a shop or business sells when it is closing down and wants to liquidate its inventory. Liquidation goods may however also become available from the stock of an individual or business that might have gone bankrupt. Or from surplus stock, overstock, and end-of-line stock which sometimes are also sold as liquidation goods.

      There are companies that actively seek liquidated stock directly from retailers, government, auctioneers, stock salvage companies, and bankruptcy intermediaries. Their main appeal is that they are able to buy in truck load quantities, to then resell the liquidated stock in smaller lots. There may be a number of intermediaries involved in the liquidation of the stock, depending on the size of the liquidation; the main parties involved are liquidation wholesalers, but even retail shops, market traders and online merchants.

      Liquidation Wholesalers

      In order to start the business of buying and selling liquidation goods, the ideal thing to do is to browse the Internet for websites that provide information regarding reliable and reputed liquidation wholesalers. Some of the reliable websites have a database of thousands of legitimate suppliers. This database is constantly updated with prescreened, categorized suppliers so that it is easy to find the right source.

      The range of products available with these wholesalers include virtually everything that is sold in retail stores, such as jewelry, seasonal merchandise, fashion accessories, decorative items, tools and hardware, pet products, kitchenware, and bathroom items. However, the wholesale inventory keeps on changing constantly, and if one item is available on a certain day, it might not be available the next day. It is, therefore, important to keep checking the inventory list through the website and be aware of special deals and new lines. The liquidation wholesalers do not insist on selling whole pallets of a single product, and as such, it is possible to buy even one case and have a variety of different products for sale. Moreover, unprecedented bargains can also be obtained because the wholesaler had also bought the stocks inexpensively and might be interested in liquidating them. These wholesalers provide viable solutions to those who wish to buy goods for resale and those who need to sell their goods.

      Starting Up

      It is possible to make a good profit by buying and selling these goods, but in order to start this process, it is necessary to be aware of the positive and negative aspects.

      Finding The Right Source

      By browsing the Internet, it is possible to find websites that will give information regarding the wholesalers and the stocks that they carry. It is important to find the right website so that reliable wholesalers can be located. While looking for the right goods to buy, it is advisable to stay away from returns because these goods must have issues, and as such, it might be difficult to resell these products. It is also possible to get liquidation goods from smaller local stores at a fraction of the wholesaler’s cost. The most important criterion is that the source should be legitimate.

      This can be found out by getting the contact information and checking the same. If there is no response to the phone or if the mail address does not exist, it would be best to keep away from such a source. If a contact is established, it would be advisable to ask for customer references and check its customer services.

      Deciding What To Buy

      A crucial aspect of this business is the decision regarding what should be bought. Having decided the supplier, it is necessary to get constant updates on the types and quantities of goods that are available. It is also important to know the exact liquidation cost of the goods along with all associated costs, such as shipping. It is also advisable to analyze the wholesale price and the retail price in order to get a fair idea of the profitability of the deal. Making a deal for a product without proper market research is the perfect recipe for failure. It is essential that, apart from the purchase cost, all other costs are taken into account, such as any repairs, cleaning, and repackaging.

      Analyzing The Product Market

      Apart from analyzing the different cost aspects, it is also essential to find out the lowest selling price, the specifications, and the shipping costs and to find out if the products are saleable. These factors will enable you to evaluate the expected profit. An analysis of the market trends will also help in identifying the low–cost, slow-moving products that have a good potential of turning in good profit margins. It is advisable to use such analyses to identify the items that people are waiting to buy because it would then be easy to dispose of the goods. In effect, while deciding what to buy, it is important to keep track of what can be sold easily so that the goods do not get stuck in a warehouse awaiting further liquidation at a loss.

      Help From the Online Site

      A lot of help can be available from websites that provide all relevant information regarding buying liquidation goods. Apart from the identification of reliable suppliers, these websites also offer the following assistance:

      1) One-On-One Support: If a person needs any help, clarification, or further information, the queries are answered satisfactorily, based on proper research so that the person succeeds in his or her business.

      2) Categorization Of Suppliers: Thousands of suppliers are categorized by location so that it is easy to find a legitimate supplier in the neighborhood. Detailed supplier information is also provided. The information sheet also enumerates whether the supplier accepts small orders and the minimum order quantities.

      3) Comprehensive Reviews Of Suppliers: This way, the shady ones can be identified. It is done by providing reviews regarding anonymous purchases, experiences of other members, and comments on its forums.

      4) Research team: If a person is not able to find a suitable supplier or a specific product, the website has a full research team to provide the required information.

      5) Market Guides: Market guides provide insights into the following aspects: hot selling items; average selling prices; the expected margins; market trends; potential pitfalls; market strategies; ways of finding the best supplier; marketing strategies to earn maximum profit; alternate places to sell; recognizing whether a seller is a fraud and how to keep a safe distance; how to recognize a good deal; how to choose a product that will yield the most returns; and information regarding which products are selling and which products are stagnant.

      In order to be successful in the business of buying and selling liquidated goods, it is essential to get all the above information from a reliable website, understand the market, do proper market research, and base the decision regarding choosing a reliable supplier and the products to buy on the information provided in the website.
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      cheapTshirts (21 May 2014)

    3. WholesaleForum's Avatar
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      #2
      Thanks for the article, however it fails to explain the liquidation process and recommend some good liquidation sources.

      In most cases the company liquidating the stock will appoint an official receiver. The official receiver is generally a large liquidator, or a company that has good links with the main liquidators.

      The receiver will sell on the merchandise in large lots (generally minimum one truck load, approximately 48 pallets) to other liquidators. The stock is then graded by these second level liquidators (in many cases these liquidators keep the best stock for resale at retail prices for higher markup), and resold to wholesalers at varying prices depending on the stock's grade classification.

      Some liquidators will not grade the stock, they will simply mark it as unchecked, or label it generically as shelf-pulls, returns, defective, end-of-line, etc to save on costs. Be prepared to pay extra for graded stock compared to unchecked liquidated stock.

      Wholesalers will then either sell on the pallets to retailers, or sell cartons wholesale to smaller resellers, or retail themselves.

      If you want to make liquidation stock work for you, and turn it into a profitable business, you need to buy as far up the supply chain as possible, which in most cases will mean that you need to have storage space, a warehouse, or send the goods to your fulfillment company who will store the stock for you and ship out individual orders (make sure you have inspected the stock before you pass it on to your order fulfillment company).

      Here are some liquidators sources:

      US

      - http://www.liquidation.com (this is a liquidated stock aggregator owned by Liquidity Services Inc, NASDAQ listed. It works using an auction format, which often means that you can obtain liquidation stock at as little as 5% of MSRP vs 10-15% of MSRP when buying directly from a liquidator. One good strategy is to bid the maximum you are willing to spend on 5-10 auctions, and you will find that some of your bids will end up being successful. Make sure you can bear the cost of winning all the bids you place.)

      - http://www.govliquidation.com/ (owned by Liquidity Services Inc)

      - http://www.viatrading.com/


      UK

      - http://www.gemwholesale.co.uk/

      - http://www.stockshifters.com

      - http://www.uk-liquidation.co.uk (owned by Liquidity Services Inc, NASDAQ listed as LQDT)

      - http://www.liquibiz.com/ (owned by Liquidity Services Inc)

      - https://www.argosclearance.co.uk/ Argos clearance stock


      Alternative strategies:

      - A good alternative strategy to obtain liquidated stock is to visit local repair shops. Many of these shops have large stocks of refurbished goods for which the owner was unwilling to pay the repair bill. Often the repair shop will be willing to sell these goods at their cost of repair plus a small markup for storing the repaired units.

      - A second option that can work quite well is to contact stock salvage companies. These are companies that purchase obsolete stock from large corporations and even liquidators and large retailers, to then repair the stock and sell it on at a significant discount (mainly because these liquidators obtained the stock free of charge, since the owner of the stock was simply willing to get rid of it as quickly as possible at no cost).


      Warnings:

      - Make sure you are dealing with a reputable source, and always be alert about the grade of the stock. See How Do I Source Overstocks? for a list of stock grades.

      - If you are dealing in electrical goods returns, beware that electricals have some of the highest repair rates. Unless you can repair electricals yourself, or have access to a cost effective repair service that is local to you, you may struggle to make a profit from customer returns of electrical goods. If electricals don't suit your circumstances, opt for safer liquidated stock like clothing or giftware, where the most likely cause for returning the item is an issue with the stitching, wrong size, unwanted color.

      - If you are dealing in liquidated furniture, especially flat packed furntiure, beware that a piece of furniture may have been made up of multiple packs. If the liquidator only sends you one of the packs that make up the furniture unit, you are likely to be a loss unless the missing pack is included in a following lot. Therefore, if you are buying flat packed liquidated furniture, consider buying in large lots to ensure an even mix of packs.


      If you are looking to compete by reselling in demand products, and you are unwilling to import or go directly to a manufacturer, reselling liquidation stock can be an ideal strategy because often the stock is a one time opportunity which fewer competitors will have access to.
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    4. Thank you for this post:

      cheapTshirts (21 May 2014)

    5. lordet is offline

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      #3
      Hello friends,

      I'm thinking about opening an online plus size sneaker store in Turkey. The problem is finding plus size branded sneakers. Buying directly from Nike, Adidas, Puma and etc seems not possible in small quantities.

      One alternative is wholesale distributors, one alternative is liquidators. The problem with the wholesale alternatives is they don't offer the best products... And finding sizes above 12 is difficult. Finding them from liquidators is even much harder.

      So please give me advise and new ideas for realizing the project. How can I do that?

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      #4
      We actually sell branded clothing at below wholesale price. We sell brands like O'Neill, Brooks Shoes, Canada Goose, FlyLow, Westcomb, Saucony, Keen, Vibram, Umbro, Acorn, Chaco and many other brands. Everything is high quality and below wholesale price. The product is also poly bagged and ready for retail with UPC codes and all the manufacture information. Most of the people that buy from us resell the product on eBay and Amazon. They love this product because the its ready to be sent to Amazon FBA. We send out a newsletter each month with all the available deals.

    7. Thank you for this post:

      hilogogifts (13 Mar 2014)

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