Liquidation Auctions and the Growth of eCommerce

Over the last few years, the popularity of liquidation auctions has grown alongside the popularity of online commerce or eCommerce.In the United States alone, there are 220 million online shoppers, a number that keeps increasing every year. Online commerce has reached a number of $396.7 billion in the U.S. in 2016. By 2020, sales are expected to reach over $684 billion.

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Growing markets have also brought in new businesses and individuals to the world of online sales. Many have seen an opportunity to start selling merchandise on online platforms like Amazon and eBay. However, competition has been growing each day as more and more sellers find innovative ways to source merchandise at low prices enabling them to offer products online well below the usual retail price. Looking closely, prices of single items are bordering with wholesale. So how does it make any financial sense to sell at such low prices?

The traditional way of sourcing merchandise was through wholesale suppliers. You’d buy in bulk keeping the price as low as possible, work with a number of wholesalers to give yourself the chance to always have the products available and to be able to pick the lowest offering. But with the market in the state it is currently in, the margin for profit is slim if at all existent. So it is time to turn to new sources to procure your merchandise.

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One of these sources are liquidation companies that, like many others businesses, have taken to the internet to expand their reach and engage a larger audience. For a small online business owner, liquidation auctions represent a great opportunity to source quality merchandise at prices below wholesale.

However, before bidding on any liquidation merchandise, there are some guidelines you need to follow to make the experience pleasant and profitable.

Liquidation Auctions

It is easy to type liquidation auction into a search engine and enter the first option given. However, this is not the best choice to make. Doing proper research is half the job when it comes to securing quality merchandise at the lowest prices.

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When looking for a liquidation auction, make sure you find one that has been around for a while, that has a wide range of services and that has built a formidable reputation over the years. You should pay close attention to client reviews as you can learn a lot from other clients’ experiences.

Once you find a suitable liquidation auction, it is time to bid. Liquidation auctions work just like any other auction, with the winner taking home a pallet of merchandise.

Low Prices and Market Competitiveness

More and more small businesses turn to liquidation auctions. Prices are way below wholesale as liquidation platforms have exclusive contracts with retailers and manufacturers, avoiding mediators such as wholesale suppliers.

With prices of single products offered on Amazon being very close to wholesale, buying through liquidation auctions allows you to keep a healthy profit margin while staying very competitive in the market.

As you will read later on, liquidation merchandise has not been renowned for quality. This emphasizes the importance of working with reputable liquidation platforms, such as Direct Liquidation. Such companies forge ties with wholesale giants like Walmart and Target, reputable names in the business themselves, in order to provide the quality of products that the buyers demand.

As pallets of Walmart and Target merchandise are being liquidated or sold directly by the retailers, the Direct Liquidation online platform serves as a window to a wider online audience and customer base.

In addition, the traditional way was for the wholesalers to snap up truckloads of this merchandise and sell it on later with a wholesalers markup. Offering the merchandise directly to end consumers eliminates the need for a mediator or a middleman. This, in turn, eliminates the wholesalers’ markup, keeping the prices well below wholesale, giving you the competitive edge.

Surplus, Returns, Refurbished Merchandise

Many have heard that surplus merchandise, as well as customer returns and refurbished products, are sold at liquidation auctions, and believe this compromises quality. However, whether a product is refurbished by the manufacturer or the liquidator, it is submitted to strict tests to ensure it is functioning as good as new.

Surplus merchandise usually means new products with price tags still attached to them that have been sent to liquidation because the retailer needed space in the store for a new collection.

Customer returns, like surplus merchandise, can be new products that have been returned because the buyer received a wrong color product or a wrong size. Even though such products get returned unopened, they can’t be sold as new!

So, if you’d like to secure your spot in the growing online commerce world, check out the liquidation auctions for quality merchandise at low prices.

Direct Liquidation is a goTRG company.

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