How To Start Up And Scale A Refurbished Electronics Resale Business
If you’re considering starting a business selling refurbished consumer electronics, one of the cheapest and best routes into the industry is to buy wholesale merchandise from a top-tier liquidation specialist such as Direct Liquidation. Here we explain what you need to do to both start up and scale up a refurbished electronics resale business.
Why Sell Refurbished Electronics?
- Refurbished electronics are much cheaper to buy wholesale than new items.
- The market for refurbished electronics is growing year-on-year.
- Refurbished electronics appeal to customers on a varying spectrum of budgets.
- Many channels through which to sell refurbished electronics both online and off.
- The opportunity to easily upscale your refurbished electronics business.
What Are Refurbished Electronics?
Refurbished electronics sourced from a liquidator are, as the name suggests, previously faulty electronics that have been brought back up to factory specifications.
Every year, some of the country’s biggest name retailers such as Target and Amazon take back hundreds and hundreds of electrical items that have been returned to stores because they’re either faulty or damaged in some respect. The retailers either refurbish these products themselves or bring in third-party refurbishment specialists before selling them on in bulk to wholesalers, or they sell them ‘as is’ to liquidators who refurbish the electronics themselves before selling them to their business customers.
Because the products are refurbished (or ready to be refurbished), they can be bought for a much lower price than brand new electronics, meaning there’s much more room for a very good return on your investment when buying these types of products.
Where’s The Best Place To Buy Refurbished Electronics?
If you’re looking for the best source of refurbished electronics, you should look no further than Direct Liquidation. A Better Business Bureau-accredited top tier liquidation specialist with over ten years’ experience in the industry, we are one the channels major retailers such as Walmart, Target, Lowe’s hardware, and Amazon utilize to sell off their excess inventory – in this case, consumer electronics.
This means you’ll find refurbished electronics being sold mainly in pallets but also in boxloads and truckloads coming from some of the world’s major electronics manufacturers such as Samsung, Sony, Apple, Microsoft, LG, HP, and Google, to name but a few.
The refurbished products Direct Liquidation sells are graded from A-C as follows:
These are products that have been returned to manufacturers’ specifications and are in perfect condition. That means they won’t bear any damage and will work straight out of the box as if they are brand new. Grade A refurbished electronics come in either the original packaging or good quality white or brown replacement packaging. All original accessories such as chargers and headphones will be present or will have been replaced like-for-like, and the products will come with all original documentation apart from the manufacturer’s warranty. Instead, Direct Liquidation offers its own 90-day warranty on the refurbished electronics we sell.
Grade B refurbished electronics will be returned to manufacturer specs, but unlike Grade A products, they will bear slight damage such as light scratches or barely visible foxing. As above, original or replacement packaging will be provided, as will all accessories and documentation minus the original manufacturer’s warranty. Again, this will be replaced with a 90-day Direct Liquidation warranty for extra peace of mind.
Grade C refurbished electronics will be as above but will bear very visible damage such as dents, scratched screens, and scuffed surfaces. The products will have been returned to manufacturers’ specs, so they will work perfectly well, but because of their condition, they will sell for considerably less than grades A and B electronics. However, this does not mean they are of little value to the electronics reseller. There are plenty of customers out there who want good quality electronics, but don’t have a huge amount of money to spend. These customers will find grade C refurbished electronics very attractive, as will customers who want working electronics but don’t care about their cosmetic condition.
Buying Refurbished Electronics From Direct Liquidation
It’s easy to buy refurbished electronics from Direct Liquidation. Once you’ve signed up for a free account here, you can browse our online marketplace to see what refurbished electronics are currently on offer. We offer refurbished electronics from both big-name retailers such as Walmart and Target, as well as from other sources. This means there’s a huge range of products to choose from to suit your business’s needs, whether you’ve decided to specialize in computers, laptops, and smartphones, games consoles and accessories, or even quadcopters and drones. Direct Liquidation refurbishes all its products itself and offers a 90-day warranty to customers for extra peace of mind.
Sold in pallets, boxloads or truckloads, refurbished electronics can be bought either via live auction, for a fixed or negotiated price. If you wish to buy via auction, all you need to do is enter bids while the auction is live and sit back and see if you’re the winner. If you are, all that’s left to do is pay and arrange shipping. Alternatively, if a lot of refurbished electronics has a ‘Buy it Now’ button, you can purchase it straight away. You’ll still pay a much lower price than you’ll find offered by other wholesale suppliers, meaning you’ll still have plenty of room to make a profit. Finally, if you have your own price for a pallet of electronics in mind, you can approach us directly. If we like your offer, that’s the price you’ll pay.
Starting Up A Refurbished Electronics Business
Once you’ve purchased refurbished electronics from Direct Liquidation, your next step will be where and how you sell them on to customers. First, you’ll have to decide what type of business you want to start up – online, offline, or a bit of both. We’ve outlined some of the most common ways to sell refurbished electronics below:
While more Americans now prefer to buy their electronics online, there’s still a very sizable chunk of the population who still like to buy from bricks and mortar stores. That means that opening up a store can still be a good way to reach a large number of customers. Of course, there are plenty of things to take into consideration if this is the way you wish to do business such as overheads like rent, bills, and staff costs (if applicable). If the numbers add up, opening a store that sells a mix of new, used, and refurbished electronics can be a very viable business.
Of course, in this day and age, it’s not an either/or choice. Most main street retailers also sell online to customers all over the country. Having your own website where customers can buy from your store is a great companion business. You can also sell through other channels such as online eCommerce sites.
Your Own Website
One quick and easy way of selling to customers is to set up your own website listing what you have to sell. This can be as part of a ‘multichannel’ approach where you sell not only through your own site but also through other online sales platforms. Having your own site helps to build brand identity, and offering things like live chats and other easy ways for customers to get in touch will help build a loyal customer base. On your own website, you can also offer customers multiple ways to pay such as credit and debit card payments or PayPal, as well as offering special offers such as multibuy and percentage off sales as and when you like.
Oh, and don’t forget to make your website smartphone friendly. Smartphones are rapidly overtaking laptops as customers’ preferred method to shop and purchase products online, so be sure to make your site as smartphone-friendly and easy to use to increase your chances of making sales.
Amazon and eBay
A lot of sellers choose to sell their refurbished electronics through the giants of the eCommerce world – Amazon and eBay. It’s not hard to see why. The sites have between them around 290 million unique visitors a month in the United States alone, so tapping into that market seems like a no brainer, especially when you consider how cheap it is to list products on them, and how services such as Amazon’s very generous ‘Fulfilled by Amazon’ program handles everything from stock storage to shipping to customer services for you for a very small monthly fee.
However, there are downsides to selling on eBay and Amazon that might put you off. You’ll be one of millions of sellers, and that can make it hard to get your products seen by customers over your competitors. Also, there are restrictions imposed on certain brand items, with only authorized sellers being allowed to sell on Amazon, for example. If you try selling restricted products on there, they will be taken down. This is why it’s always worth checking out what you can sell, how much it’s going to cost you and what the chances are of selling when you’re in competition with so many others. Until your business reaches a certain size, you might decide that it’s more worthwhile to sell through a smaller online store host.
Smaller Online Store Hosts
If you don’t want to sell on Amazon or eBay, there are, thankfully, a huge number of smaller store hosting websites out there such as Wix and Shopify. Stores are easy to set up, and the fees charged are relatively small, to begin with, so you won’t have to spend too much when you’re just starting out. Better still, most of the smaller store hosting sites offer free trial periods where you can give them a try without having to spend anything.
If you’re going to reach as many customers as you can, then you definitely should consider a presence on social media. No longer just a place to post pictures of cats and babies, social media is now a powerful marketing tool in its own right. Instagram is a great place to show off what you have for sale, Twitter can be very useful for spreading the word and Facebook, with its cheap targeted advertising packages and dedicated marketplace, is a great way to reach customers. With millions of users across the globe, sellers ignore social media at their peril these days.
Another option available to resellers that doesn’t involve using third party marketplaces or setting up your own store is selling to customers in the local area. Taking out classified ads and listing products on sites such as Craigslist are either free or cost very little, and attract customers who are looking for electronics on their own doorsteps. And depending on what type of electronics you choose to sell, local flea markets are also well worth taking into consideration. For a small fee, stalls at flea markets can be rented so you can sell budget electronics to customers on a budget. Another advantage of going local is you generally cut out shipping fees because customers tend to come and pick their purchases up from you. This means you can save even more money and increase your profits.
Scaling Up A Refurbished Electronics Business
Once resellers have established successful refurbished electronics businesses, many start to look for ways to scale them up. There are several ways this can be done. Some of the most popular are listed below.
Upgrade To A Store
We’ve already mentioned setting up an electronics store, but for those who have only been selling online or at swap meets and flea markets, opening up an electronics store after establishing a successful business can be a great way to upscale as you can reach a previously untapped customer base. And with your own store, you might also wish to invest in employees. As far as electronics businesses go, employees with expert knowledge of the industry are a bonus for any business owner, as many people will come to your business not only to purchase products but also for expert advice both on sales and technical issues.
Invest In Storage
Another way to scale up your business is to invest in storage space. As your business grows, you’ll inevitably need more space to house your merchandise, which is why finding affordable storage will eventually be a necessity in a lot of cases depending on how big you want your business to be. You can either rent specialist storage space, your own warehouse, or you can even buy your own storage space and rent out the parts you don’t need to other businesses, opening up another revenue stream.
Move To Truckloads
If you’ve previously been buying boxloads and pallets of refurbished electronics, you may find you don’t have enough stock to meet demand as your business expands. If this the case, switching to buying truckloads of refurbished electronics is an easy scaling up solution. This will give you much more stock to play with, and the extra savings resellers make by buying truckloads over pallets will likely lead to an increase in your profits.
Invest In Automation Tools
If you do most of your selling via online marketplaces such as Amazon and eBay, you should consider investing in automation software to make selling on these sites easier. Automation tools help you find the best, most competitive products to sell on these platforms, and automatically adjust prices on the fly to keep in step with the competition. They also help sellers win the coveted Amazon ‘Buy Box’ – especially those who are using Amazon’s popular ‘Fulfilled by Amazon’ service.
Consider Becoming A Supplier
As your business scales up, you might want to consider not only supplying refurbished electronics to customers, but also to other retailers. Discount shops and flea market stallholders are always on the lookout for new sources of cheap wholesale merchandise, and if you approach them with a supply deal, they might just take you up on the offer.
Refurbishing Your Own Electronics
As well as selling refurbished electronics, Direct Liquidation also sells untested products. While many of these will be good to go, some products will need to be refurbished before they can be sold. Another way of scaling up your business is to do the refurbishing yourself or employ the services of a third party to do the job for you. Untested electronics are very cheap to buy, which means there’s plenty of potential to make a healthy profit from them once they’ve been returned to factory spec and sold to the public after being graded appropriately.
Starting, running, and scaling up a refurbished electronics business can be a great way of making a living. If you’re interested in starting up your own business selling refurbished electronics, you should check out what Direct Liquidation can do for your business today.
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.
View Diego’s Bio on YouTube.
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