For a while now, you have been considering doing a bit of wholesale shopping to resell online. However, your idea has not progressed much further than that. Your main concern is not only what to buy and sell, but also where to buy, and especially, how to ship the merchandise to your house and then on to your customers. In this short guide, we will try to point several ways you can make the online resale business work and also put special focus on the shipping side of the business.
This is a subject many stumble on as the choices out there are many and come in all shapes and sizes. Finding your path in that jungle will be hard but it is not impossible. The first step you have to take is sit down and make a list of things you enjoy working with: certain products, a specific market segment, be it clothing or maybe even electronics. Finding that sweet spot, or a niche market, is essential for people starting out because these gaps in the market provide you the chance to start out easier as the supply in that segment is not covering the demand. Your goal is to cover that demand.
The second goal is to find the right supplier. Buying wholesale is the traditional way and wholesale product suppliers would be able of providing you with some great deals. However, the market dynamics are such that even the best deals are barely keeping the online sellers afloat.
Prices of single items sold online are near wholesale, leaving you barely any profit margin. This brings you to a choice that is gaining in popularity: liquidation companies. Unlike wholesalers, these companies don’t buy the merchandise but provide a platform for manufacturers and retailers who might be having a hard time liquidating merchandise through their usual outlets find more customers quicker and easier.
While the most important thing is to find a reputable liquidator who will guarantee you the quality of merchandise, it is also important that the liquidator be able to provide you the best services, which we will discuss a bit later in the guide. Once you find a reliable liquidation company, you are offered closeout merchandise, overstock merchandise, customer returned items and so on. While top liquidators will ensure that the quality of merchandise is at a high level, each type has its own advantages and disadvantages.
While buying returner items in bulk, especially the unsorted customer returns, might be the cheapest option, closeout and overstock merchandise will give you the best balance between quality and price. This is due to the nature of closeout and overstock merchandise. These products have never been sold before and are still brand new, but are being liquidated through closeouts liquidation companies because either manufacturers or retailers need the space in the warehouse or on storefront shelves as new merchandise is about to come in.
The difference between closeout merchandise and overstock merchandise is slim. Both are brand new, but unlike overstock, which can be attributed to bad business management and the store owners ordering excess amounts of merchandise and never even getting to display some of it, closeouts have either been displayed in the store and never sold, or they are more a seasonal type of merchandise that has not been all sold during the season. Instead of keeping this merchandise stored somewhere, retailers will liquidate it through closeout liquidation companies. The same can be said of electronic gadgets such as smartphones. Whenever a new model comes out, the older ones are discounted and very often sold to closeout buyers.
In both cases, you are buying brand new merchandise for prices up to 25 to 50 percent below wholesale merchandise. This gives you a great chance to succeed in the business. Every type of product is sold either in closeout lots or pallets. This means you will be stocked for a while, and depending on your closeout suppliers, you should always have the merchandise available for order.
Before we move on to the shipping, it has to be added that working with reputable closeout liquidation companies enables you to buy only the merchandise your customers are demanding. Closeout lots and closeout pallets are all accompanied by a manifest, a list essentially, showing you the type, the quantity and the quality of the merchandise within that lot or pallet. But once you complete the purchase, it is time to have the merchandise delivered.
Once you have bought your pallet of overstock merchandise, it is time to arrange shipping. This again is why we suggest you work with reputable liquidators as these companies will have been working with top-tier carriers to make sure the merchandise they sell arrives on time and undamaged. In addition, each closeout liquidation company will have a detailed shipping information page that you should certainly check out.
The pricing and the way your merchandise is shipped depends on the size of the lot or a closeout pallet of merchandise you purchase. Closeout suppliers usually ship merchandise 72 hours within payment receipt and it will take one to seven days to be delivered within the United States and a bit longer for international deliveries.
Smaller loads or parcels are shipped usually through common carriers like FedEx or UPS while pallets and larger loads are dispatched by land sea or air as freight. Freight loads are beyond the usual parcel limitations put out by any carrier.
Closeout liquidation companies will also allow you to arrange your own shipping if you think you would be able to get a better deal this way. You are required to provide a shipping label. While some overstock merchandise can be shipped from the manufacturers and retailers directly, top liquidators like Direct Liquidation offer pallets and truckloads of overstock merchandise and all is shipped from their Kentucky warehouse.
In any case, these methods of shipping show you the way to organize your shipping methods when it comes to reselling the merchandise.
Since you will probably be selling single items on platforms like Amazon, you can simplify your shipping options and calculations as you will be only using common carriers for parcel shipping.
Before even setting up your business, it is wise to contact all the carriers you have near you and ask about your options. You can also look for shipping options directly on the platform you will be using.
Like closeout liquidation companies, you can also let your customers arrange the shipping. However, this is often advised against, due to vulnerability to fraud. Buyers might be shopping from a stolen account or arranging shipping services from such an account which, when it comes to reimbursement could leave you liable. You could also see cases of items being redirected to different locations so they can claim the product has never been delivered, leaving you both without a payment and the item under the most seller protection policies. So, if you are just starting out, be careful with this option, or avoid it altogether.
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