10 Top Tips for Reselling Liquidated Stock For Profit
Buying and selling liquidated merchandise can be a good way of making some extra cash on the side, or even a good full-time income stream – a main business. However, although it might seem straightforward – buy for less, sell at a profit – there are plenty of points you have to keep in mind and pay attention to, both when buying and selling.
When purchasing, you have to keep the costs down to the lowest levels possible. So we’ll start there with the first few tips on how to save some cash on purchase. We’ll then move on to tips on what to do when reselling the purchased liquidated stock.
- Always read the listing information, as the details on what you are buying will help you advertise the products when you list them for sale.
- Purchase merchandise from the closest distribution center to lower or completely eliminate delivery costs.
- Resale businesses can skip on paying sales tax; inquire about it with your local authorities.
- Inspect, review, and prepare your stock. The presentation is very important, and it includes reviewing, photographing, and describing your products.
- Interact with your customers.
- Advertise your products.
- Understand sales platforms, and pick the one that suits you best.
- Make sure the price is right to attract customers.
The Successful Sale Begins With the Successful Purchase
When buying liquidated stock through liquidation companies, there are some major points you have to pay special attention to. You are certainly aware that this merchandise includes customer returns, used items, and some items that can be labeled as new. Depending on the market you are selling into, you have to be careful when selecting your stock.
Tip 1: Read Listings Thoroughly
Luckily, when working with Direct Liquidation, or companies of similar stature like us, you will be provided with a detailed description of most lots. This will come in the form of a manifest, which is essentially a packing list that contains information on the quantity and the type of items included in the listing, be it a smaller lot, pallet, or even a truckload of merchandise.
This information will also include the merchandise condition, which is of utmost importance for you. If you want to buy and sell high-quality items as they have a higher market appeal and can fetch more on resale, learning the liquidator’s grading system and understanding the merchandise condition is key. But you may also choose to purchase untested customer returns as these are sold at a much lower price point. In any case, you need information on merchandise condition to make your business decisions.
Tip 2: Location, Location, Location
Direct Liquidation has a large network of distribution centers across the United States and Canada. Buying from the closest one to you can save you some extra cash on delivery costs. Additionally, if you have a suitable vehicle and can get to the distribution center yourself, you can pick up the merchandise and eliminate the delivery costs completely.
Tip 3: Get Your Tax Exemption
Businesses that strictly deal with resale can secure a tax exemption. If you are only buying merchandise for resale purposes, you can avoid paying tax on the purchase by providing a resale exemption certificate. For the exact details, you have to inquire with your local authorities. Still, savings can be made in the purchase process, putting you in a better position when calculating your profit margin and setting the final sale price.
Tips on Selling Liquidated Stock
Now that you have acquired the merchandise, it is time to go through several steps that have to be done before reselling your stock. These include reviewing, testing, and potentially fixing certain items if needed. This will increase your chances of making a profit.
Tip 4: Review Your Merchandise
The mistake plenty of sellers make is selling the merchandise straight away without even inspecting it. Keep in mind that you are dealing with liquidated stock. Despite all the information on merchandise conditions you get from the manifest, it is good practice to inspect the merchandise yourself once you have it. Even if you went and picked up the merchandise yourself and transported it carefully, some products can be damaged. If you have the items delivered, you have no control over it, increasing the risk of package damage.
For these reasons, you must inspect all the items and make sure everything is in order, so you can either do the repairs that may be necessary or avoid listing and shipping a faulty item.
Tip 5: Selling Online? Take Quality Photos
When you have your items all sorted and inspected, it is time to take photos. For example, eBay suggests that a quality listing should have high-resolution, high-quality photos. Pay attention to details and highlight them in the pictures. Make sure the items fill the frame and try exposing properly and shooting with a solid color background that will make your product pop.
Tip 6: Provide Plenty of Detail
As with the photographs, your listing description needs to include all the relevant details. The best policy is to be honest and not try to hide any flaws, because this increases the risk of you having to deal with either returns, bad reviews, or even penalties.
Make sure your listing describes the product in detail. But this does not include only listing the specs but also highlighting the selling points of the product.
Tip 7: Sell on Online Marketplaces and through Social Media
This tip is actually aimed at bringing to your attention the different ways in which eCommerce platforms operate.
Since you are dealing with liquidated merchandise, the safer bet is to sell on platforms such as eBay or Amazon. Amazon requires you to have an Approved Seller Account, and in case you want to deal with brand names, you are required to provide proof that you have bought large amounts of items through a wholesaler, meaning these are brand new items.
List items correctly – If you sell a liquidated item as new when it isn’t, you may get a claim filed against you by the buyer, which could actually lead you to lose your Amazon Seller Account. Dealing with liquidated stock will probably mean you will not get your seller account approval in the first place. This ties back into the previous tip of listing as much detail as possible and being honest in your listings.
Additionally, you can advertise your stock locally using sites like Facebook Marketplace and Craigslist. This means buyers close to you can buy directly, with no fees and no shipping to worry about. This can be far more profitable than selling nationally.
Tip 8: Advertise Your Products Offline
This will depend on your budget and the potential profit you should have calculated in advance. Make sure to factor in a certain amount to use for ads. Flyering, local classifieds, radio, and ads in local magazines and other publications can be a great way of bringing in more customers, especially if you have a custom-built website listing your wares that you can direct your audience towards.
Tip 9: Good Customer Service
This is something that ties into the previous tip. Having an honest relationship with your buyers is a great way to build a reputation. Additionally, buyers are likely to return to a seller with whom they had a pleasant experience and received a product that was exactly as advertised and as they expected it to be. A happy customer is not only a returning customer, but they are also more likely to leave a positive review and star-rating that will then attract more customers if buying online – and to tell friends and family if selling locally.
Part of this relationship, if selling online, is also to expedite the delivery. Make sure you ship the ordered product as soon as possible.
Tip 10: Price Your Listings Carefully
For the last tip in this list, we will look at pricing. When purchasing through liquidation companies, you are paying below the ‘new’ wholesale price. And while you may be getting merchandise sold ‘as new,’ you should not sell them at full retail price. The fact that you sourced the items for less puts you in a great position to undercut your competitors, but you need to be clear to the customer what the product’s condition is. Put yourself in place of your buyer; would you buy a returned or refurbished item or a brand new item from a retailer if the price was the same? Make sure you go through listings similar to yours, see what your competition is doing, and adjust your price.
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.