Succeeding in the e-commerce depends on a number of factors, some of which you can have a direct effect on and some of which are out of your hand. But in any case, your goal is to make as many cost cuts as possible in order to secure as high a profit margin as possible. Related to this is the debate whether it is better to buy by the pallet or the truckload. Buying by the truckload does at least keep the shipping costs down. But this does not take into account personal preference, budget limitations or simple stock availability. So, instead of arguing and debating why one would be better than the other, we will lay down some pros and cons of the two, so you can decide which one works best for you.
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Buying merchandise by the pallet is probably the most common option amongst Amazon sellers. Purchasing merchandise this way enables the business/entrepreneur to work from the comfort of their home, without having to hire a storage space to keep all the deliveries. Buying merchandise by the pallet also keeps the load easier to handle. If you are working from your home, and you have a limited space to operate in, whether it is a room, or basement or maybe the garage, unpacking the pallet, reviewing every single unit, taking photos in preparation for the listing will not take as much time and you will very quickly have the products online and up for sale.
In terms of profitability, buying customer returns has its advantages. You can secure a higher profit margin by purchasing through reputable liquidators. This will keep the prices down on its own, which we will discuss later. It also reduces the cost of every single unit as buying in bulk tends to be cheaper than buying single products.
Shipping costs are something everyone has to consider when purchasing merchandise. Pallets allow you to save in that respect as well. Buying returns pallets means you are getting more merchandise delivered to your address at once. This is a significant saving over having your products delivered individually. All this adds to our list of pros.
However, there are potential issues. Very often customer returns are sold ‘as is’. This might mean that the products have been tested but are not working, or they might even be untested. It is not uncommon for the products to be offered as unsorted customer returns, meaning these products have not been touched at all, but these pallets are also the cheapest. This can become a problem if you are buying from an unreliable source or you have not done your homework properly.
Truckloads of merchandise are a perfect choice if you are looking to cut your costs down further. They are also great if you are looking to get your business to a higher level and start running a larger operation.
The advantages we mentioned for the pallets are multiplied when it comes to buying truckloads of merchandise. You are cutting down on the purchase cost because you are buying a large number of products and the price per unit is being driven further down. Even the shipping costs turn out to be cheaper in the end.
However, the cons are slightly different here. First, although you are driving down the price per unit, you are still making a sizeable investment, which some small businesses or individual sellers might not be able to afford. Second, what you might have saved in shipping costs and on the truckload purchase might be channeled into additional employees that will help you unload, unpack, review, sort, photograph and list in a reasonable time.
Additionally, truckload freight usually works in such a way that the driver will deliver the load and you have a limited window in which you have to unload the merchandise before you start incurring penalties. This means that failing to unload your merchandise in time will cost you extra cash. And yes, you will have to be able to handle all the merchandise and store it somewhere, so it either means clogging up your whole house and living on your couch or renting a storage space with adequate capacity.
As you can see, the better option is the one that fits your particular circumstances. If you don’t have the space to handle a truckload, buy by the pallet. Or if you have space and the budget go for a truckload.
Whatever the case, it is essential to work with reputable suppliers. Customer returns are often liquidated, and retail players such as Walmart liquidate their customer returns, overstock or closeouts through Walmart liquidations.
Now, Walmart also uses certain liquidation platforms to reach a wider online audience, and to sell merchandise directly to its customers, whether by a truckload or by the pallet. Since Walmart has its own reputation to worry about, it will only look to open a storefront on reputable liquidation platforms. Also, reputable liquidators will only look to work with top retailers and manufacturers. Why is this important? As we mentioned earlier, a large quantity of customer return merchandise is sold as is, untested and often even unsorted. This means that purchasing from any source could lead you into significant losses on the investment. The partnership between top liquidators and retailers guarantees quality.
In addition, every top liquidator will let you know exactly what sort of merchandise you are buying through the manifest. This is a list showing you exactly the type, the quantity and the condition of the merchandise in each pallet. If your supplier is withholding information, it is time you moved on. In addition, refurbished customer returned products (as is often the case with returned electronics for sale), will be given a 90-day warranty by liquidators. So making the right choice actually means ensuring quality and a healthy profit margin, no matter whether you buy by the pallet or the truckload.
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Kersten works as a sales representative for Direct Liquidation helping businesses to source liquidation inventory from the world’s top retailers and manufacturers. Kersten works with single pallet, LTL and truckload buyers hand in hand to ensure their businesses stay stocked up with the highest quality merchandise year round.
Schedule a sales callback with Kersten right now and find out how he can help your business profit with liquidation merchandise.
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