Since the dawn of the Digital Age, sales have progressively shifted from brick and mortar shops to the internet. E-commerce has seen a huge boom in the past few years, as more and more people have begun to move away from the traditional way of shopping, preferring the comfort of their homes, and the ease of their laptops and phones, over going out to visit stores.
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Not only has this trend brought great benefits to buyers, but it has also brought along with it a number of tremendous opportunities for anyone looking to set up and own a wholesale buying and reselling business. Due to the increasing amounts of imports from the US, internet users in Asian countries, specifically in India, have grown from 243 million in 2014 to around 730 million in 2018, therefore making the present time highly favorable for prospective business owners to familiarize themselves with liquidation.
Liquidation happens when a company or brand is selling its goods as a result of bankruptcy, legal judgment or the products being discontinued, overstocked or being customer returns which, for legal reasons, cannot be sold as ‘new’ again. This means that products end up being sold through liquidation auctions, where buyers have the chance to snap up quality items at steep discounts.
Until recently, liquidation merchandise could not usually be considered quality merchandise. However, not only have resellers seen the potential of this market, but even retailers have jumped onto this ship as well. What does that have to do with quality, you might ask? The fact is that names such as Walmart, Target (two of the best and largest retailers in the world) and even the online retailer Amazon have a huge throughput and a large portion of the merchandise gets returned.
Retailers have built up a reputation and they can’t afford to lose face by liquidating scrap. This is why they have dedicated departments that deal with customer returns and liquidation merchandise. Products get reviewed, refurbished repackaged and readied for sale. But still, you can get these products, which are in new or as new condition, at significantly cut prices, sometimes at 10 percent off the original retail price. This is where the money is. This is your opportunity.
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However, you need to follow a simple set of rules when purchasing liquidated merchandise. Make sure you are buying through a reputable platform, like Direct Liquidation, and make sure you are buying merchandise liquidated by a known retailer. Make sure you know the retail prices of the products you are after in order to be able to calculate the potential profits and to know what purchase price no to step above.
Additionally, double check the manifests before making any purchases. Manifests are essentially packing lists that show you what’s in a pallet, the type, the descriptions of the items, the quantity and their quality, if the merchandise has been reviewed. The higher the grade, the better the quality. You might have to pay a bit more compared to unsorted customer returns, which is merchandise that hasn’t gone through a review process, but grade A products will fetch more on resale.
A career as a wholesale liquidator can be extremely fruitful. This claim can be backed by the astounding statistics from the US alone that confirm the upward trend in small business activities, of which wholesaling is a part, and show how small businesses have increased by 49% since 1942, and have created a staggering 65% of the net new jobs. Add to this the fact that nearly 54% of all US sales happen to be from such businesses, and you will be reassured and encouraged to become a part of this now global market.
Besides, you are not limited geographically anymore. Not only can you purchase your merchandise from every corner of the world, but you can also ship it to any corner of the world. This means that your customer base will not local, it will be worldwide, giving you a wider market where you can place your products.
However, this business is not without its challenges. Ideally, you’d want to be able to get your products to their buyers within a period of 30 days. For that, however, you need to deal with problems such as overexposure, timely delivery and dealing with returns, among others.
The rule of thumb is never to buy too much from wholesale liquidators but always make sure you have enough in your inventory to cater to your clients. However, since making a place in the marketplace takes time, you’re advised to be patient, and start smaller.
As for returned items, you can sell them as you bought them, at even cheaper rates on special sales. An effective way to reduce the 30% return rate of items bought online would be to start off with items of good quality and establishing a friendly website with good customer service. Not only would this bring you more traffic as it has been found that 34% of all shoppers prefer to use their smartphone to shop, but it will also ensure that any issues or mishaps involving your customers are sorted out at once.
These are other steps you are advised to take when you are starting a new business. Besides legal obligations, like registering the company and applying for a sales tax permit, you need to know the market you are looking to enter. Do your research as thoroughly as possible and possibly enlist the help of professionals. This will give insight into market dynamics and show you the supply and demand balance.
Jumping into an oversupplied market is not a good option. Instead, looking for markets that are short-supplied might be the right way to go for several reasons. First, with the demand for a certain product already in place, you are able to fill the supply gap immediately. With friendly customer service, quality products, and affordable prices, which you can provide if you are sourcing merchandise through liquidation companies, you should be able to build your own customer base, your name and reputation in this short-supplied market.
Second, this will allow you to learn the ropes of the business and build on your own experience and expertise. It will prepare you to handle new and more competitive markets once you know how the business works and what you have to do. Essentially it is all a matter of upscaling your current operation. On the plus side, providing quality products and quality service will build your customer base, and loyal customers will follow you to any market you enter. If they need something new, you will be the first seller they look for, which makes any transition easier.
With an initial investment of a little effort, insight and thorough research, you can be a proud owner of a thriving business from home. Good luck!
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Jordan currently works as a sales representative for Direct Liquidation, assisting businesses with product sourcing of liquidated merchandise from the largest retailers in the world. Whether you are looking for a pallet or a truckload Jordan is here to help you grow your business.
Schedule a sales callback with Jordan right now or check out his latest liquidation deals.
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