As already noted above, for your business to succeed you have to provide quality merchandise and service at affordable prices. Affordable prices for customers mean a tough procurement process because the goal is to make money and buying merchandise at wholesale prices. Liquidation goods are sold at prices well below wholesale which is what provides you the right profit margin and allows you to stay competitive in any market.
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But to understand how liquidation goods can help your business, you have to understand liquidation merchandise first. In the olden days, liquidation goods meant used, broken and scrap merchandise that no one wanted to buy and had to be liquidated for pennies on the dollar. The truth is, there is a large portion of such merchandise still in the offering.
However, things have changed as businesses moved to online platforms. One such platform is Direct Liquidation that provides access to huge numbers of liquidated merchandise to customers all over the world. This is what retailers have taken notice off and now you can find the likes of Walmart, Target or Lowe’s opening their storefronts on Direct Liquidation to reach a wider audience and liquidate their merchandise quickly. But why would the likes of Walmart, Target or Lowe’s liquidate their merchandise you might ask?
The truth is that these retailers have a huge throughput and, especially when it comes to online sales, 30 percent of all merchandise sold gets returned by the buyers for one reason or another. Some products get returned in brand new condition, some products get returned slightly used while other might be returned due to a blemish or malfunction. Even though a new product in its original packaging could essentially be resold as new, it is not allowed so it has to be liquidated. This is the process of receiving the customer returns, reviewing, refurbishing, repackaging, sorting, packing up into pallets and selling at significantly reduced prices, well below wholesale.
Now, if you want to provide quality merchandise, you have to look for either brand new customer returns or refurbished customer returns that come with money-back guarantee and extended warranty. In comparison to other liquidated merchandise these items will come at a higher price point, but will also be more attractive on resale and fetch a higher price.
There are also unsorted customer returns for those willing to take more risk. This type of merchandise is basically only packed together customer returns that have not been reviewed or refurbished. You may be getting broken, used merchandise but you may also get a brand new item that got tossed into the pallet. Due to the price of unsorted customer returns, this one brand new item you may come across can be worth the whole pallet and basically return all your invested money.
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In any case, there is a way of knowing what you are buying and this is by going through a manifest. Manifests are essentially packing lists prepared either by the liquidator or the retailer that uses a liquidation platform to get rid of their customer returns, overstock or closeouts. These packing lists contain general information about the products, such as names, descriptions, type of merchandise, quantity and quality.
There are certain grades used in the liquidation world to indicate the condition of the merchandise. You need to be familiar with the merchandise conditions so that you are able to buy and provide your customers with the merchandise they need, at a price and quality that will boost your reputation and keep your business growing.
Additionally, both retailers and the liquidation platform have a vast network of distribution centers and you are able to tailor your search for products in such a way to show you results that are closest to you. This means you are saving on delivery costs, which will help to boost your profit margin on resale. Sometimes, you can also pick up the merchandise yourself.
Now that you know what liquidation goods are and where to find the quality products, there is one final step which actually is all up to you. Once you have the merchandise delivered or picked up, it is time to prepare everything for listing. This means taking as many photos of the products as you can, listing them online and making sure you do the service part properly because a happy customer is a loyal customer.
So when it comes to making money with liquidation goods, the goal is to find a reputable source, find the right quality merchandise by utilizing all the tools at your disposal and then selling the merchandise on at the right price. Following these steps will provide your business the best chance of success.
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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.
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