The appeal of liquidated stock among small businesses or individuals who engage in buying and reselling such merchandise on ecommerce platforms like Amazon is growing constantly. Liquidators are finding new ways to offer more merchandise to customers, retailers and manufacturers. They are seeing the benefits of such platforms to reach a wider audience online and sell their overstock or closeouts merchandise directly to you, the customers. In that chain, you are profiting from the fact that you can buy merchandise directly from retailers and manufacturers without high minimum order requirements, and without the wholesale markup you usually pay if you are sourcing the merchandise through a wholesaler, or a number of them.
Moving the liquidation business online has opened a world of opportunities for the whole value chain, but has also opened a new door to buyers worldwide and enabled the sales and purchase from anywhere in the world. However, this has created additional work for liquidators that have to familiarize themselves with export rules and regulations, seek out partners in foreign countries and maybe look to form partnerships with carrier companies. While this might sound complicated, it opens a world of new opportunities as well as a chance to tap new markets. But exporting merchandise is not only limited to large companies and liquidators; rather it can be done by small businesses and even individuals.
The merchandise manufactured and produced in the United States has the reputation of being the best value for money, and it is not unusual to see a strong appetite for the merchandise abroad. This guide will look into the procedures for exporting merchandise, government channels through which you can find business opportunities in Argentina and place your merchandise in the Argentinian market.
The United States Commercial Service in Argentina is the government’s extended trade arm every company planning to export goods into Argentina should contact first. Exporters are urged to research the market to the best of their ability in order to make sure that the customers fulfill all the import requirements. It is also essential to follow regulations in order to avoid any possible issues. While you might receive orders through your liquidation website, the U.S. Department of Commerce’s International Trade Administration urges all entities to forge close relationships with local agents and find your representatives or distributors in the country, which is the exact reason you should look to do thorough market research. It is also highly advisable to consult with local market professionals and lawyers.
However, before discussing export procedures, it has to be noted that, with the growth of ecommerce in Argentina, it is possible to market your products online. This means that you can expect direct sales to customers in Argentina without actually forging any ties or finding a representative in the country. However, there are certain restrictions as the Argentine equivalent of the IRS, AFIP, has set up regulations that limits duty-free imports to $50 per year with 50 percent tariff on any delivery over $25. Orders made online that have a value of up to $3000 are charged 50 percent on the value of the merchandise.
These online purchases would also have to be delivered by the Argentine postal service or courier. Orders that exceed the $3000 value threshold can’t be delivered through the Argentine postal service. Courier imports require the buyer to register as an importer, fill out the form 4550 prior to importing and pick the product up at the main international airport near Buenos Aires.
Import procedures are extensive and have seen a number of changes over the past couple of years, which is exactly the reason you should look for a local customs broker. However, in short, importers and exporters must be registered with Argentine Customs in order to be eligible for international trade. The Secretariat of Commerce and the Argentine Tax and Customs Authority (AFIP) require importers to apply for approval before importing. The application is processed within 15 days in most cases but can be put under review for indefinite period. Importers must file documentation through the Argentine customs broker, who files it through S.I.M. – Sistema Informático MALVINA, after which the merchandise must arrive in Argentina within 180 days. The documentation required is extensive and so are the import regulations. These include commercial invoices, bill of lading or airway bill for Air cargo shipments, packing lists and the insurance certificate.
Import tariffs average around 22 percent. As a member of the Mercosul, the South American trade block, Argentina applies the CET or the common external tariff, ranging from 0 to 20 percent for most products. However, tariffs for automotive merchandise can reach up to 35 percent. In addition to the import tariffs, other fees include the value added tax (VAT) of 10.5 percent or 21 percent on CIF (Cost+Insurance+Freight) on which the ad-valorem duties are assessed. If you are importing goods for resale, the VAT is 5.5 percent or 10 percent on CIF. It is also possible to be levied a 0.5 percent statistics fee on CIF.
There is also an anticipated profit tax for retail merchandise of 3 percent and a 1.5 percent gross income tax. It has to be noted that textiles and apparel imports as well as toys and games are heavily restricted. The Argentine Customs Bureau also informs that there are import controls for certain categories that, in addition to apparel and toys, include household appliances, electronic devices, motorcycles and footwear, meaning these categories face the heaviest restrictions. The Aduana, the Customs Bureau, as part of AFIP is responsible for applying, collecting and controlling taxes under the Argentine Customs Code.
So, in general, if you plan on exporting US Liquidation Pallets into Argentina, research the market, contact government agencies to help you find and form ties with reputable customs brokers and business partners in Argentina.
Now that you know what challenges you might face as an exporter of US liquidation pallets into Argentina, let us turn our attention towards the liquidation merchandise and what it actually brings to the table.
The first answer is hidden within the ecommerce market dynamics. If you look at the prices of any new or used product on platforms like Amazon or eBay, you will find that the price for a single unit is close to what someone would pay wholesale. How is that possible? There are a few things you need to understand. Wholesale suppliers have to purchase merchandise from somewhere in order to deliver stock to you. They serve as a middle man between the manufacturer and retailers and you, the online buyer or reseller. Buying from manufacturers is the best option you can choose, however, this usually requires a substantial initial investment as manufacturers have high minimum order requirements. This is why wholesalers are able to purchase truckload of merchandise at the lowest prices, before sorting it into pallets and lots and offering it to you with a wholesaler’s markup.
We did, however, say that wholesalers purchase merchandise from retailers also. This is because retailers might decide to move location and, instead of packing all the merchandise and transporting it to the new store, they decide to liquidate it, sell it at huge discounts Then wholesale suppliers usually snap up all the merchandise very quickly in order to resell it back to the customers.
But retailers don’t have to move location to liquidate merchandise, especially if they are dealing with what is known as seasonal goods, such as clothing. At the turn of the season, the unsold summer clothes might be packed up, pulled off the shelves and sold in closeout sales, which are retailers’ way of liquidating merchandise. Wholesalers are again the main customers with their capacity to absorb truckloads of merchandise, which will be resold at wholesale prices. Shelf pulls, however, are not the only merchandise retailers try to get rid of quickly. At times, managers make mistakes and their decisions lead to stock oversupply or overstock where the store orders more merchandise than it is required. Often pallets of brand new, unused merchandise might be waiting around in the storage room, never to see the store shelves before being offloaded through closeout sales.
So why would wholesalers buy such merchandise and how do they make a profit? Closeouts merchandise if often sold at prices 25 to 50 percent below wholesale, which also explains how prices of single units on ecommerce websites are close to wholesale, as they have been purchased either directly from the manufacturers or retailers at the lowest prices. But how do you meet the manufacturers’ high minimum order requirement and how do you beat the wholesalers to closeouts stock from retailers? The answer is liquidation companies.
Before we go deeper into how the liquidation business functions, we must urge you to thoroughly research the options. The same way you would search for a reputable customs broker in Argentina to help you export the merchandise into Argentina, you have to look for a reputable liquidation company because this will grant you access to the best manufacturers and retailers. Always compare the prices and look for the best companies to work with. Top-tier liquidators often look to form ties with top-tier retailers and manufacturers, which is why you can see Walmart liquidations merchandise being offered through the Direct Liquidation storefront.
In fact, a large portion of liquidated merchandise is customer return pallets, and these products can range from brand new to tested but not working or even complete scrap. So to avoid issues, such as product misrepresentation, or withholding information by the seller about the products you are looking to purchase, find the most reputable companies to work with.
Why is buying from liquidation companies a better option than buying wholesale? The answer is simple: the low price. And the price is due to the fact that retailers and manufacturers use liquidation companies as an outlet to directly reach a wider online audience and sell their liquidated stock directly to you, the buyers. This means that you can still purchase from the manufacturers without high order restrictions and you can beat the wholesale suppliers to the closeouts as retailers also opt to liquidate their merchandise through liquidation websites. This results in low prices, which enable you to keep a healthy profit margin and to stay competitive in the market.
The answer to this question lies in the choices you make. If you are looking to tap an undersupplied market for specialized products such as refurbished electronics from the 80s or even originals, then that is the merchandise you should look for. But if you are interested in competing in one of the tightly contested markets such as refurbished electronics, you might look to buy bulk electronics or returned electronics for sale. In short, the merchandise that you are comfortable with and that the market demands could be the best liquidated merchandise. The choice is yours.
As we previously mentioned, a large portion of liquidated merchandise is customer returned products, shelf-pulls and even unsorted customer returns that are simply packed up and offered for sale without testing or cherry picking the best among the bunch. Despite such merchandise having the lowest price point, it is a risk since you could purchase a pallet of unsorted customer returns and 50 percent of it is scrap. However, as sometimes products get returned by the customers without ever being opened or used, you might hit the jackpot and cover your investment with one sale.
But how do you eliminate risk and how do liquidation businesses tackle potential quality issues? They do so by signing exclusive contracts with top retailers and manufacturers. These contracts often include a high standard that the merchandise has to reach in order to be sold through the liquidation company. In addition, top-tier liquidators will provide you with information about the products you are purchasing. This is done through something called a manifest, which is essentially a list of merchandise contained within a pallet, together with the quality grade, and you always know what you are buying and whether the risk could be worth it or not.
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