Understanding The Refurbished Wholesale Business

Have you been toying with the idea of getting into the refurbished wholesale liquidation business? If so, you should not take this venture lightly and go into it uninformed. Rather, you will need to fully understand the ins and outs of the business as well as the potential difficulties you will need to face.

There are a lot of misconceptions when it comes to wholesale, liquidation and even refurbished items. In fact, most people know very little about these items. For instance, most people think these terms can be used interchangeably. However, as we will see in this article, they are very different things, and knowing the differences between them will be crucial to the success of your business.

So, before you run out and start buying liquidation pallets or bidding on wholesale liquidation auctions, take the time to educate yourself about what these things really are and what this business really entails.

The Difference Between Wholesale and Liquidation

Though wholesale and liquidation are often used interchangeably, they are not exactly the same thing. You will find that liquidation is actually a term that means companies will want to turn the assets they have into cash, even if they have to sell way below what they could get from selling the items to retail customers. This may be because certain clothing ranges weren’t selling well, or are now out of fashion – it could be last-generation electronics that the store wants to replace on their shelves, and need to clear out remaining stock as quickly as possible.

However, this practice does bring some benefits to the retailer. One benefit is that they are able to empty space in their warehouses for items that will be more profitable for them. Another benefit is that they can get rid of their inventory very quickly. Wholesale, on the other hand, is a bit different. When a retailer sells an item at wholesale prices, they are looking to make a small profit.

This is unlike businesses doing liquidation as they simply want the products out of their hands. A wholesale minded business, however, will want to buy items as cheaply as possible and sell them for as much as they can, though they know they won’t get them at retail prices, as they are generally selling this inventory to the retailers themselves where they will be able to sell them closer to MSRP.

What about wholesale liquidation products? That is a combination of the best of both worlds and often comes with high risk, coupled with high reward. A big factor that comes into play with wholesale liquidation is the ability to re-market the items to new audiences and buyers.

How to Profit From Wholesale Refurbished Merchandise

When dealing with wholesale and liquidation inventory, you will find different types available. One of these types is known as refurbished items. Often confused with reconditioned items, refurbished items are items, that have been restored to like-new condition.

This means that professionals have taken the time to totally restore these items so that they work just as if you have taken it right out of the package. If you’re looking to sell electronics, refurbished wholesale electronics might the best bet for you.

With a refurbished item, there may be cosmetic problems, like scratches, but those issues do not affect how well the item works. The buying and selling of refurbished electronics, tools and automotive items is a multimillion dollar industry, and when it comes to the wholesale and liquidation circles, refurbished items are some of the hottest around.

Because they have been previously used or even possibly damaged, yet they are restored to like-new condition, you can get them at an amazing price. This brings benefits to the buyer as well as the seller.

Buying refurbished electronics wholesale, or from a liquidation source, could be very lucrative for you. Potential clients can range from young people who can’t afford to buy the original new items to families and even businesses, who will be looking to buy refurbished bulk items.

For example, those working in procurement for organizations may well be buying iPads in bulk for business customers will not have the resale licenses required to go direct to the refurbished electronics wholesaler. But if you can offer these items for sale either individually or as lots from your own business, you will find such interested parties wanting to make deals with you, as well as individual customers looking for a bargain – and there you go, once you’ve sourced the goods, you have a refurbished tablets wholesale business, and you may find many of them wanting to return.

Why Focus on Wholesale Refurbished Electronics?

Unlike products in a lot of other areas, e.g. clothes, consumers generally don’t mind as much having second-hand electronics. This is evident on websites like eBay, where there are thriving markets for refurbished tablets, iPhones, computers, TVs, you name it.

When people buy electronic items such as these, they just want them to work – if the price is low enough, they aren’t going to be concerned by small cosmetic issues, they don’t develop emotional attachments to them like people tend to do with jewelry, clothing or toys. What this means for you is that if you can present the market with good-quality refurbished electronics at the right price, your customers aren’t going to care about its history. This is one of the main reasons used electronics have such a vibrant market. 

This is good news for you, because bulk refurbished items are in plentiful supply. As are untested customer returns, which may well all be in perfect condition also. If you are running a large enough operation, consider doing your own repairs to lines of electronics. If you buy in larger quantities items can become parts donors to get other items back into a fully working condition – this business model can help you maximize your profits in a way that you won’t be able to by simply reselling stock.

Refurbished electronics wholesalers often supply a large range of electronics in a variety of different conditions. If you’re new to this business, you might want to stick to new, like-new or refurbished items. Make sure you know how this grading works, and price these items to your customers to reflect this. Selling Grade C electronics as just ‘Used’ is going to get you in trouble, costing you refunds and reputational damage.

How to Make Money Selling Wholesale Refurbished Items

As someone who is interested in the business of refurbished wholesale and liquidation inventory, you probably want to know how you can make this work well for you. The basics of this business are essentially buying at a low price and selling at a high one. The trick is, however, is to buy the right items for your target customers.

Typically, refurbished bulk items will do well when you choose to buy them, but you want to keep a few things in mind. For instance, you will need to make sure that you are buying refurbished items that are popular and in demand.

An example of this may be tablets like refurbished iPads. Right now, the 3rd generation iPad is hot on the market, and a few versions have come out since the first-generation iPad. Because of this, it may be a bad move to buy a lot of wholesale refurbished iPads that are all first-generation as there just isn’t much of a market for them anymore.

Contacting liquidators is ideal when you really want to make a profit on the inventory you have chosen to focus on. As mentioned above, when you are interested in wholesale and liquidation, you can make a bigger profit if you shop liquidation sales instead of those that are considered wholesale.

However, it isn’t always easy to find liquidation sales as manufacturers and retailers tend to have contracts with wholesalers that they sell to. That being said, buying from a wholesale company will still get you a profit assuming you sell at, or close to, retail prices.

How to Be Really Successful Selling Liquidation Products

If you sell at rates that genuinely give your customers a good deal, you will have a much higher turnover of product, and overall a bigger income. And you’ll also grow your business more quickly. Remember – it’s profits, not profit margins per item that counts.

This might seem like a bad option to take when just starting out, because a higher turnover is more expensive and more intensive, for potentially less money. But you are more likely to be getting the orders in, and once you have the orders coming in you are in a position to expand – hire staff, ultimately move to bigger premises and get a team behind you.

Don’t read this the wrong way: this is clearly not without its difficulties and it is one of the biggest steps you can take in this business. However, if you do it carefully, follow proper advice and do your research and homework, you will find out that taking this extra step will pay off hugely.

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