When you look at online resale businesses you’d think that every business owner is buying brand new merchandise directly from the manufacturer to resell online. You also see manufacturers selling some merchandise directly. You know that quality, in addition to affordable price, is what brings customers back to your store.
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So, if someone told you that you could earn more by selling merchandise returned by customers, you’d smile and turn away. However, this is true, and we are going to show you how customer returns can help you take your business to the next level.
This is where most people get it wrong. Hearing customer returns, in combination with liquidation, many think that these are used, damaged or malfunctioning items that the customer returned. While this might be the case for a significant portion of returned merchandise, you’d be surprised to see all the reasons people return the things they buy.
Some return the products they buy because it wouldn’t work out of the box, some return them because they expected the item to look different in real life. Some return products because of damage the packaging sustained during transport. In some cases, even though the unit is fully functional and brand new, people simply decide to ship it back in return for a new one.
Some, on the other hand, take advantage of the generous return policy and guarantee periods given by retailers, by buying, testing and returning the product within a 30-day money-back guarantee period.
Now, to understand how this can help you boost your business, you have to know what happens to the merchandise that gets returned. It obviously can’t be put back on the shelves to sell as new. So, it has to be liquidated. Retailers usually have teams that work specifically on receiving, sorting out, packaging up and liquidating customer returned merchandise.
While the product that was returned unopened and in brand new condition can’t be sold as new again, it can be liquidated. The positive thing for you as a buyer and online reseller is the fact that the retailer will inspect the merchandise, slap a new 30-day money-back guarantee to it and add a hefty warranty and sell it at a significant discount. Effectively, you are buying brand new products at discounted prices.
The buying process is fairly simple. You just have to look in places where you wouldn’t usually be looking.
Retailers usually have their own liquidation divisions to deal with the sorting, packaging and liquidation process. However, the sale is done in bulk and often you will find that wholesalers turn up with their trucks and buy as much as they can leaving only bits and pieces for small buyers. This means that you have to buy your customer returns from a liquidator that will also go over the merchandise, sort it into pallets, cherry pick the best items to sell individually for higher profit, slap on their markup on the remaining products and sell it on to you.
Buying at a wholesale price is the way to go if you go by the old rulebook. You buy wholesale to sell at retail prices with a slight markup. And if you can build a healthy business relationship with a number of wholesalers, that much the better. You can have stock available all the time and have the liberty of buying only from the wholesaler that offers the best conditions at any given moment, a simple tactic.
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And it would be a winning tactic if it wasn’t for the competition that is selling single items at prices near your wholesale purchase price, leaving you almost no room for profit and price adjustment. As a result, this tactic might not be worth the time and effort you put into your business. You also see many struggling to keep their businesses alive while following this particular tactic. This is because the competition has found a way to buy these customer returns at prices well below wholesale.
As noted above, retailers have their own liquidation divisions. But you are unable to get to the merchandise because the wholesalers buy by a truckload. However, over recent years, liquidation companies such as Direct Liquidation took to the internet to exploit a new business opportunity. Direct Liquidation built an online platform to help major retailers reach a wider audience and sell their merchandise. This is why you’ll see the company partnering with the retail giants such as Walmart, Amazon, Target and home improvement specialist Lowe’s as they take advantage of the platform to liquidate their merchandise quicker.
The platform allows you to buy merchandise directly from the retailer with no wholesaler’s markup. With a large number of potential buyers, retailers don’t need the wholesalers to come in and buy by a truckload as purchases come in from all over the world in large numbers. This means that the merchandise is liquidated just as quickly.
But buying liquidated merchandise is not the only trick you can use to reduce your purchase cots and bump the profit margin. You can also look to cut on other procurements costs such as the cost of delivery.
Retailers of this magnitude have their storefronts all over the United States and Canada, and so does Direct Liquidation. With the number of distribution centers out there, you can choose to buy only from those that will keep your delivery costs at a minimum. You may even cut them completely by going to the warehouse and picking up the merchandise yourself.
If you live in North Carolina’s city of Greensboro, you’re in luck, especially if you are looking to buy home improvement merchandise. It is not only Greensboro buyers that can benefit from this distribution center. The city is well connected via Interstate to a number of other nearby cities and metropolitan areas such as Charlotte, Winston Salem, Burlington, High Point or Durham.
So next to buying at prices below wholesale, you can minimize or completely eliminate the delivery costs. Your profit margin will look a lot healthier, allowing you to earn more and be more competitive in the market.
This is a good question with a fairly simple answer. Many fear that pallets of liquidated merchandise will contain a bunch of scrap products and only a couple of good ones with some resale value. While this might have been true in the past, Direct Liquidation has worked on building its reputation up and providing a high quality service. The partnerships with reputable brands and retailers speaks volumes in itself and the quality of merchandise liquidated is at a high level.
However, this does not mean that there are no more unsorted customer returns or lower grade merchandise. This is a liquidation business after all. However, to help you buy the right stuff, liquidators will provide you with a manifest for every pallet of merchandise you intend to buy. The manifest is essentially a packing list showing you the type, the quantity and the condition of the merchandise contained within a pallet.
This means you can only pick and choose the merchandise you want and of a quality you require. It will come at a higher purchase price but will also carry more resale value. In any case, you have the tools to steer clear of the merchandise you don’t want and only buy what you need and what your customers demand.
Direct Liquidation is a goTRG company.
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Corey works as a sales representative for Direct Liquidation helping businesses to source liquidation inventory from the world’s top retailers and manufacturers. Corey 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 Corey right now and find out how he can help your business profit with liquidation merchandise.
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