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Tips for trading with liquidation, surplus and closeout merchandise

Tips for trading with liquidation, surplus and closeout merchandise

More and more entrepreneurs are purchasing and reselling liquidation stock in the secondary market. Closeout products and store returns pallets consist of pretty much anything offered at retail, from gadgets to clothing to home equipment. But precisely what product types provide the top chance of profit? The right formula will vary for each and every business. A common principle: the more knowledge you've got about a product type and the market for these particular merchandise, the greater revenue you could generate.

Things to ask yourself when choosing liquidation, surplus and closeout goods

Whatever kind of liquidation stock you are planning to buy, the following are some vital points to think about:

Will you be able to relocate the goods?

Usually when you are starting a business, it is advisable to buy items you can move, although you may need to pay a bit more. After you develop a good foundation for your business, you could start taking risks as a way to produce a greater profit.

Do you have knowledge to identify a successful purchase and provide good selling price?

For example, most business owners in the secondary market devoted several years working in retail selling a particular type of products. You won't find any confirmed prices for liquidation merchandise. If you're able to make use of your expertise in the product niche to buy low and sell high, you're going to have an advantage.

Are you able to fix broken products?

Some of the products in returns liquidation pallets could be defective and unsellable in their current form. This "waste factor" is reflected in the significantly reduced price for such lots. However, if you're able to repair and produce earning from all of these damaged items, your profit increases.

Is there any kind of reselling limitation?

For example, many goods are only allowed to be offered outside the EU. Some others have requirements for defacing and could add to overhead and minimise your profit.

Diversify into hot liquidation stock types

Even though it seems logical to start with stock you know, you may discover many advantages if reselling several types of different products. In the liquidation business, they call this "diversifying your portfolio." If you sell a "diversified portfolio" of liquidation inventory, it may allow you to maintain revenues if one category of goods becomes scarce. For instance, some individuals are kicking off new businesses having liquidated stock available from recently bankrupt companies. These types of products could be abundant for several weeks, but soon most of these new firms have to either buy products from different source (most likely at a premium) or simply step out of business.

Typical liquidation stock offered

In summary: the more knowledge you have about the products you are going to offer, the more probable you are to be successful as a reseller. This is an evaluation of the aspects of the most popular liquidation goods bought in the secondary market.

Electronic Products

Wholesale electronic devices liquidation lots are usually the most desired type mainly because for the maximum recovery opportunities, but high investment is needed to buy items.
Products include tv sets, mp3 players, video cameras, as well as laptops or computers.
Technical knowledge does help, especially if repairs' needed and to determine the best selling price.
Resells well in most geographical locations.
Buying cost is usually set as a percentage of retail or wholesale price.

Accessories, Hardware, Components

Next most desired type of products because of a great combination of compact gadgets, devices, equipment along with other favored stock types.
Typically the safest category to invest in mainly because of quick reselling value and lack of repair requirements.
Usually combined with tight reselling limitations, for example requirements for exportation and defacing.
Buying price generally is set as a percentage of retail or wholesale price.

Soft products

More of a specialized niche.
Apparel liquidation lots can be challenging category to price because products are mainly offered on a price / unit basis, not as a simple percentage of wholesale / retail price.
In many instances, merchants will designate clothing for export only.
Reselling opportunities could be reduced in specific geographical locations. For example, it's hard to sell snow jackets in hot areas.

Footwear

More of a specialized niche market.
Most price ranges, based on types of shoes. The pricier the shoes, the higher the risk.
Traded on price / pair basis.
Typically, sellers will mark wholesale shoe liquidation lots for export only.

Mixed stocks

More of a niche market. This category is a mixture of footwear, apparel and hard goods.
Usually, specified for export only.
High-risk / maximum pay back chance. Many wholesale goods liquidation lots with little to no damages are often really money-making, although some with a high waste factor are not.
For a new trader with minimal knowledge in the category, mixed products could be an extremely overwhelming area to price and resale before experience is gained.

These represent the primary types of liquidation inventory for sale in the secondary market. However, you can find more sub-categories including Furniture, Housewares, and Private Brand. Every merchant possesses his own collection of classification names, pricing, and requirements.

It's advisable before buying liquidation goods to make a solid foundation with items that you know. And after that diversify into different categories which could require greater risk, but likewise have the possibility to boost your profit per lot. Once you build knowledge, only the sky's your limit to achieve your goals in the liquidation world.

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