Should I Sell Liquidation Merchandise Locally or On eBay?
When it comes to selling merchandise bought from Direct Liquidation, where is the best place and most profitable place to sell your stock? While it may be tempting to start selling on eBay, is this the best platform for your business? If you’re able to, should you try selling locally instead? In this article, we take a look at the differences between selling locally and selling on eBay, and why resellers who are in a position to do so should try the former method before heading online.
The Advantages Of Selling Locally
- Cut out shipping fees In most cases
- Build up a loyal local customer base
- Free or cheap places to sell, such as flea markets and local classifieds
- Avoid expensive online subscription, listing and final sales fees
- The potential to double or even triple profits on pallets sourced from a liquidator
The Advantages Of Selling On eBay
- Work on your business from home in the evenings and weekends.
- Reach a huge audience both at home and abroad.
- Work from the most remote areas – all you need is an Internet connection.
- More opportunities to upscale your business due to the much larger quantity of merchandise you can sell online.
Sourcing Wholesale Liquidation Merchandise
Before we get into the pros and cons of selling liquidated merchandise locally or via a platform such as eBay, we first need to discuss what liquidated merchandise is, and what is the best place to source it from.
Liquidated merchandise is wholesale stock purchased from liquidators who in turn source from some of the country’s largest retailers. Every year, industry leaders such as Walmart, Amazon and Target find themselves in possession of huge quantities of surplus merchandise for a variety of reasons. Broadly speaking, this surplus merchandise falls into three categories – customer returns, overstock and closeouts. Let’s take a look at each category in a little more detail.
By far the largest category the big-name retailers seek to resell is customer returns. Every year, customers return 30% of all products ordered online, with 8.9% of products being returned to bricks and mortar stores. The reasons for these returns range from products not working, to them being superficially or heavily damaged, to customers simply changing their minds and returning brand new products back to stores. Whatever the reason for these returns, the retailers look to sell them as quickly as they can so they do not take up valuable warehouse space that should be used for new products. Liquidators either partner up with retailers to sell this type of stock on their behalf or they buy returns in bulk lots for a hefty discount – savings they then pass on to their business customers.
Overstock, as the name implies, is stock that’s surplus to a retailer’s requirements. Usually, this stock has become surplus because it’s stock that’s been over-ordered, or it’s seasonal stock that is no longer required because the season it’s tied to has been and gone. For those looking to sell small amounts of wholesale liquidated stock either locally or on eBay, overstock is one to keep your eye on, especially if you’re planning to sell seasonal lines on, say, a flea market stall. If you have the finances and the storage capacity, buying up surplus seasonal stock a year in advance can be a great way of getting hold of cheap wholesale merchandise that can then be sold for a profit when that season comes around again.
Closeouts is the name given to stock that’s usually come from stores in a retailers’ portfolio that are either permanently closing down or being restructured. Unless it can be absorbed into other stores, this stock is surplus to a retailer’s requirements and therefore needs to be liquidated to prevent it taking up valuable warehouse space.
As well as these three categories of surplus merchandise, top-tier liquidators also sell refurbished merchandise – in particular wholesale electronics. Stock in this category has either been refurbished by the retailer, by a third party on behalf of the retailer or by the liquidator themselves, often in partnership with the retailer.
Buying refurbished merchandise is a great way for resellers to get their hands on wholesale electronics at a much cheaper price than brand new electronics, and in turn they can then pass on these savings on factory spec-returned electrical items to customers who may not have the budget to go out and splash the cash on the latest gadgets and gizmos, but who still want decent-quality electronics at a reasonable price.
Purchasing Liquidation Merchandise
Now we’ve discussed the different types of liquidated merchandise, you’ll need to know the best place to buy it from. The answer for those looking to source cheap returns, overstock, closeouts and refurbished liquidated merchandise is Direct Liquidation.
With over ten years’ experience in the industry, Direct Liquidation is a Better Business Bureau-accredited top-tier liquidation specialist that sells boxloads, pallets and truckloads of liquidated stock from some of the biggest retail names in the United States. On Direct Liquidation’s online sales platform, you’ll find dedicated vendor pages from Walmart, Amazon, Lowe’s Hardware and Target, covering pretty much everything a reseller will ever need in a comprehensive list of categories:
Within those categories you’ll find a huge range of liquidated goods in conditions varying from ‘as new’ to ‘tested-not working’ coming from some of the leading manufacturers on the planet such as Apple, Samsung, Black & Decker, DeWalt, Fisher Price, Mattel, Disney, Microsoft, Sony, HP, Adidas, Fruit of the Loom, Stanley, BOSCH, Philips and many, many more. You’ll also find big-name retailer own brand products such as Walmart’s popular Blackweb and Mainstays electronics and homeware brands and Amazon’s essential Basics range.
Sold in boxloads, pallets or truckloads depending on how much stock your business requires via live auction or for a fixed or negotiated price, Direct Liquidation’s comprehensive range of liquidated merchandise is second-to-none, and it’s sold at a price that will ensure your business has the best possible chance of making a profit.
Selling Liquidation Merchandise Locally Vs. eBay
Once you’ve bought a boxload, pallet or truckload of liquidated merchandise from Direct Liquidation, it’s time to get selling. But where’s the best place to sell your goods? In this article, we’re looking at the differences between selling liquidation merchandise locally and on eBay.
While you might think the best idea is to immediately jump onboard the eBay platform (after all, eBay and Amazon have around 290 million unique visitors each month in the United States alone), this might not be the best idea – especially if you’re just starting out. It must be remembered that eBay is a massive global online sales platform, so anyone jumping straight on there to sell merchandise is going to find themselves a very small fish in an ocean-sized pond.
While eBay is a undoubtedly great place to sell items, it might not be the best place to sell wholesale liquidated goods, especially for startup businesses. For a start, there are the fees eBay charge. For most serious eBay sellers, opening a store on the website is the best way to experience everything eBay has to offer, as well as the easiest way to build up a loyal customer base. However, opening up a store on the platform comes at a price. Monthly store subscription fees range from $7.95 for the ‘Basic’ package, right up to a hefty $2,999.95 annual charge for eBay’s ‘Enterprise’ subscription.
On top of your monthly or yearly subscription charge, there are insertion and final value fees to take into consideration. Depending on the type of store subscription you take out, you’ll be allocated a number of listings that don’t cost you anything. But go above that number and you’ll be charged extra for every item you list on the site unless you’re an Enterprise customer, in which case you can pay a premium for zero fee bundle add-ons.
Final value fees apply to every item sold. The fees eBay charges depend both on the type of subscription package you have and what it is you’re selling. So if you’ve chosen to take out the cheapest ‘Starter’ subscription, you’ll pay 10% of the final sale price for most items, with a percentage varying between 3.5% and 12% for items such as books, DVDs, musical instruments, etc.
So, that’s three unavoidable charges you’ll be paying. And that’s before you’ve taken your wholesale purchase price and any overheads such as storage and shipping costs into account. As you can see, eBay may not be your best first port of call, especially when it comes to startups.
Is Selling Liquidated Merchandise Locally A Better Idea?
So what about selling locally instead? There are several advantages to selling locally, as well as several options for getting your goods in front of customers. Here, we’ve produced a graphic showing four potential selling models where you can see the pros and cons of local vs. online selling.
1: Local pickup, local sale.
2: Local pickup, online sales.
3: Freight delivery, local sales
4: Freight delivery, online sales.
As you can see, the very best, most profitable model is local pickup and local selling. Direct Liquidation offers business customers the chance to pick up from the following facilities:
If you can pick up from any of the above facilities, you’ll be vastly cutting down on travel time and fuel costs. And because you’re selling to customers in your local area, your overheads will be small as you’ll usually be able to arrange for customers to pick up directly from your business address, or you can drive the goods round to them for minimum gas costs. Thus, as the above model shows, a pallet bought with an estimated value of $1750 bought from Direct Liquidation for $800 could net you $820 in profit after gas and overhead costs.
In contrast, if we take a look at model four, where you’re paying for both freight shipping and to sell online, you’re left with a profit of just $220. And in eBay’s case, that’s before you take into account their fees. Add those on, and you could be looking at being left with hardly any profit at all. That’s why, especially when starting out, eBay is not always the best platform.
So, now we’ve shown you what you could potentially earn by sticking to selling locally, where exactly should you start? Well, a good place is your local flea market. Flea markets charge small rents for stalls, but have large customer bases. These customers are usually on the hunt for a bargain, and because you’ve sourced your merchandise from Direct Liquidation, that’s exactly what you’ll be able to offer them.
Then there are local classifieds and sites such as Craigslist, which usually allow you to list goods for sale for free. This means you’ll be able to get your business’s name out to people in your local area for very little outlay, and you’ll cut down on shipping overheads as most customers are happy to pick up from you.
Finally, don’t neglect social media. Sites like Facebook’s Marketplace offer a cheap way of listing goods for sale in your local area, and platforms such as Twitter and Instagram are great ways of getting your name out there, especially if you’re a dab hand at photography or have a way with words.
Of course, it’s not all plain sailing if you choose to sell locally. There are several factors you’ll have to take into consideration that could potentially eat into your profits. You’ll need to factor in such things as overheads – for example, do you already own your own store and all the additional costs that come with that? Do you need to pay for storage? What type of merchandise do you plan to sell, and will this hit your business with shipping costs because you specialize in selling larger items such as lawnmowers and freezers that can’t just be loaded into the back of a car. All these factors need to be taken into consideration when making your potential profit calculations.
Once you’ve made those calculations, you’ll probably come to the conclusion that when it comes to selling locally or on eBay, starting locally, building up a loyal customer base and getting some money in the bank is definitely the way to go – especially if you’re just starting out.
As we’ve shown you, when considering whether to sell locally or an eBay, there are a lot of factors to take into consideration. While it might be tempting to jump straight into eBay sales, there are many factors that might eat away at your potential profits. That’s why, especially when starting out, you should weigh up your local selling options first.
If you think selling locally is a better fit for your business, then that should be the way to go. After all, you can always set up an eBay store at a later date when you’ve built up enough momentum in your business to absorb the company’s fees. With over 220 million and growing online shoppers in the US alone, you won’t want to stay away from that enormous market forever.
However you choose to sell your liquidated merchandise, you can rest assured that if you source from Direct Liquidation, you’ll be buying the widest range of wholesale merchandise at the lowest possible price. When it comes to buying and selling locally or on eBay, you should check out what we can do for you. We’re looking forward to doing business with you.
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.
View Jordan’s Bio on YouTube.
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