Why buy liquidation products?
March 9, 2017 | Brad Peden
Whether you sell on Amazon, eBay, Facebook, retail, Craigslist, or at auction you might be wondering why would you want to buy liquidation, shell pulls, or customer returns? This is a very good question and one that more buyers should ask themselves before jumping into their first pallet or truckload purchase.
1. Margins - While this can be tricky, higher margins are a great reason to get started in the liquidation business. Where else can you find merchandise at 10-20% of the retail price? However, these numbers can often be deceiving. Factors such as waste, condition of the items, expiration dates, and inaccurate manifests can drive the percentage of retail you actually pay much higher. It is important to find suppliers that you can trust so you can reduce these risks as a buyer. Also, whenever possible it is a good idea to actually inspect the products you are purchasing to ensure that the condition is what you are expecting. Liquidation can offer great margins if you learn how be a smart and savvy buyer.
2. Volume - One of the big advantages of buying liquidation products is the ability to buy large volumes of product at one time. If you started in retail or online arbitrage, buying at auctions, or even wholesale, you know it can be hard to find enough good product to sell. Buying liquidation pallets or truckloads is a great way to increase volume. The downside is that you will probably need more channels to sell the items and not all liquidation items you purchase will typically be suitable for such channels as Amazon FBA. Building other sales channels such as eBay, Facebook, retail, or Craigslist will help to strengthen your business and will allow you to handle variety of inventory.
3. Access to brands - Have you ever tried to call up Sony, Samsung, Nike, Apple, or any other major brand to purchase their products wholesale? For most re-sellers this is a very short and unproductive conversation. Gaining access to major brand name products can be frustrating and difficult. Buying customer returns, liquidation, and shelf pull items can give re-sellers some access to these products. Being realistic is key to working with a potential supplier when trying to find these brands. Calling up your local wholesaler and demanding a whole truckload of Sony electronics in pristine condition at 10% of retail probably won't get you very far. Instead, work with your wholesales to identify pallets or truckloads that may have some of the brands would like to re-sell. Ask for manifests to be sent to you and study them. Purchasing liquidation products takes practice and the more knowledge a buyer has the better chance he or she has to be successful.
4. It can be fun and exciting! - There are few things more exciting as a re-seller than getting in a new pallet or truckload and unpacking and exploring each box and item you received. It's almost like Christmas morning, opening up presents as a kid. This is, of course, if you've done your homework on the product, vetted your supplier, developed a multi-channel sales strategy, and have realistic expectations of the condition of the items you are receiving. If you've done the work to be successful, delivery day can magical.