Many people are looking at the idea of starting up a business online, either with a view that the business will eventually supply them with their main source of income, or as a side project that will bring a bit more money into the household.
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But what sort of online business should you consider? For many, online retailing looks like a no-brainer as there are already plenty of outlets through which startup sellers can sell their wares, from the big boys such as Amazon and eBay, through to more boutique store and product-hosting sites such as Shopify and Etsy.
Of course, if it’s getting into online retail that you’re interested in, it’s not as simple as opening up an Amazon account. You’ll need to do a few things first before you launch your new business on the high seas of online retail. One of the first things you’ll need to consider is just where the merchandise for your business is coming from. Should you source your stock from a local, small scale wholesaler, or should you be thinking of casting your net wider and instead look to other sources of wholesale merchandise? The answer to that is most certainly yes. For anyone starting up a new online retail business, the very best source of top-quality merchandise is an online liquidation marketplace.
Unlike a traditional wholesaler or a smaller-scale liquidation company, a top-tier liquidation specialist such as Direct Liquidation works in partnership with some of the country’s leading retail names, names such as Walmart, Lowe’s Hardware, Target and Amazon, offering these titans of the retail world spaces on their online liquidation sales platforms through which they can sell unwanted returns direct to reselling businesses at vastly reduced prices.
Every year, companies such as Walmart and Target take back thousands of customer returns for a wide variety of reason ranging from the items not working to the customer simply changing their mind about a purchased product and returning it to a store, often in a completely brand-new condition.
No longer legally allowed to sell returns as new products despite the fact a huge number of them have never even been taken out of the box, the big-name retailers are left with large amounts of stock they cannot sell at full price, and thus this stock sits clogging up warehouse space that should be being used to house new product they can actually sell full price.
That’s where a liquidator such as Direct Liquidation steps in. By offering the big-name retailers a space on their online liquidation marketplace, a liquidator sells and distributes their retailer partners’ unwanted returns on their behalf, meaning the retailers can free up valuable warehouse space. In return for this, the retailer is prepared to take a hit on the price they can reasonably expect for their unwanted customer returns, which is why the merchandise they sell through an online liquidation sales platform is always considerably cheaper than you’ll find elsewhere.
In a nutshell, it’s a win-win situation. Big-name retailers get to dispose of stock they can no longer sell full price regardless of condition, while resellers get their hands on a vast range of top-quality customer returns in a range of conditions at a fraction of their MSRP value. That means there’s plenty of room for the canny reseller to make a profit when you buy wholesale merchandise this way.
Buying merchandise wholesale from a liquidator couldn’t be easier. Most returns liquidators offer business customers on behalf of their big-name retail partners are available to buy in pallets or truckloads either via live liquidation auctions, or for a fixed or negotiated price.
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By far the most popular way to buy pallets or truckloads of returns from a liquidation sales platform is to take part in a live auction. First, you’ll need to locate a pallet of goods you’re interested in purchasing. This can be done by using the site’s drop-down category menu and search bar features. So, if you’re interested in starting up your own consumer electronics reselling business for example, you can navigate to the ‘Electronics’ section of Direct Liquidation’s site or search for specific types of electronics such as wholesale laptops or wholesale cell phones.
Once you’ve found a pallet of returns that you think you can make a profit on after things like sales taxes, overheads, shipping costs and the like have been taken into consideration, you can set up an email notification which will alert you when the auction for the pallet of electronics you’re interested in is about to go under the hammer.
Once it does, it’s simply a matter of entering bids or multiple bids up to a predetermined bidding limit and waiting to see if you’re the winner of the auction. Don’t forget not to go over your predetermined limit. There’s no point over-bidding on a pallet and therefore decreasing your chances of turning a profit when a similar pallet of top-quality merchandise will be on offer from top names such as Target and Amazon very shortly.
If you do win the liquidation auction, the next thing you’ll have to take into consideration is shipping the goods you purchase to an address of your choice. The best rule of thumb for resellers just starting out is to minimize your costs by picking a liquidator close to home, so the only shipping overheads you’ll incur will be truck hire and fuel costs. Direct Liquidation has a network of distribution centers located throughout the United States and Canada, so you might well just have one close enough to pick up your own items.
If arranging a pickup isn’t possible, then you’ll need to ship your items either via a third-party courier or ideally by letting the liquidator handle the logistics for you. It’s worth enquiring what a liquidator’s shipping rates are as companies such as Direct Liquidation have long-standing contracts with their partner courier companies, meaning they get discounted shipping costs as both long term and frequent customers. These discounts are then passed on to their customers, meaning letting the liquidator handle the shipping might be a lot cheaper than going it alone with a third-party courier.
Once you’ve purchased a pallet of customer returns from a liquidation sales specialist, it’s time to make the most of your purchase. Many startup online sellers look to open a store on established big name brand leaders such as Amazon and eBay. While this might be tempting, both companies charge fees either at the front or the backend, meaning they might eat into your profits just at the time you need to be making as much money as you can, while spending as little as possible.
Instead, it might be a better idea to start out small by starting out local. Craigslist and online local classifieds, for example, will connect you with your local customer base, and because customers tend to come to you, you’ll cut down on postal costs.
If you really want to open your own online store, then you should check out what smaller store-hosting companies like Wix, Shopify and SquareSpace have to offer. Most of the smaller store hosts offer free trials, meaning you can try them on for size before shelling out any of your own money.
And don’t forget the power of social media. Sites like Facebook Marketplace are a great place to sell their wares, and Facebook also offers attractively-priced targeted advertising packages if you have any spare money to devote to marketing. Twitter and Instagram are also great places to grow your customer base, but you must learn to stand out from the crowd by being informative, helpful and engaging. Remember – in this day and age, you ignore the potential of social media at your peril.
Buying and selling wholesale merchandise from an online liquidation specialist such as Direct Liquidation can be a great way to set your brand-new online retail business on the right footing. If you’re thinking of starting your own business reselling customer returns, why not check out what Direct Liquidation has to offer you? And good luck as you set out on your online retail journey!
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Diego works as a sales representative for Direct Liquidation helping businesses to source liquidation inventory from the world’s top retailers and manufacturers. Diego works with single pallet, LTL and truckload buyers directly to ensure they stay in stock with high quality inventory year round.
Schedule a sales callback with Diego right now and find out how he can help your business profit with liquidation merchandise.
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