How to Identify Profitable Liquidation Pallets and Avoid Common Pitfalls

Liquidated merchandise provides great opportunities for retailers to establish and expand their business. The variety of products on offer, combined with the low prices, means you can create a unique brand identity, increase your market presence, make unique product offerings, and provide substantial savings for your customers while maintaining high profit margins.

This level of success will only occur if you approach the subject properly, with careful planning and effective strategies. Buying unsuitable products in the wrong quantities and at too high a price are easy mistakes to make for the unwary, so you need to avoid them in order to make the best of the opportunities that liquidated merchandise offers.

Identifying Suitable Pallet Loads

Liquidated merchandise is sold in relatively large quantities, often by the pallet load. However, the type and quality of items on these pallets will vary, and you need to buy what is suitable for you.

A reputable liquidator will always provide an accurate manifest detailing what is on each pallet and will give comprehensive product descriptions. You will normally buy products that you are familiar with and that existing customers demand, but the quality of these may vary depending on the reason for their sale:

• Company or branch closures will result in the availability of unsold products that are still in their original packaging and benefit from a warranty
• Discontinued lines or seasonal products will also be new, but may be more difficult to sell if more recent models are available or the season has ended
• Slow-moving products will also be new, but may be more difficult to sell
• Customer returns may have some damage or be simply not to the customers’ requirements; consequently, they will be a mixture of ‘as new’ items and those requiring some attention.

The condition and saleability of the products will be reflected in the price, and you will need to assess how realistic this price is against what you expect to be able to charge for them. Some pallets may be classed as unsorted return items, and so the condition of each product will be unknown. Consequently, the price should be lower, but you will need the capacity and the capability to rectify any faults, and you must accept that a certain proportion may not be saleable.

If you are new to liquidated merchandise, you may initially choose to play it safe by buying the more saleable items that need no work. As your confidence and experience grow, you may move on to other pallet types.

Avoiding Common Liquidation Merchandise Pitfalls

We all make mistakes, but the aim is to always learn from them. However, it’s usually better to learn from the mistakes of others, and some common pitfalls you should avoid are:

• Buying the wrong products. Before you buy anything, you should conduct some market research to understand what will sell, and you need to be able to understand what your customers want. Then you can buy the appropriate products with confidence.
  
  Sometimes ‘mystery pallets’ are available where the contents are unknown. Although you may be tempted by the prospect of getting surprise bargains, they are best avoided. Only buy unsorted returns if you are sure you can deal with them.
• Buying too many products. Your market research will tell you how well something is likely to sell. You may be tempted by low prices and quantity discounts to buy too many and then find you don’t have the space to store them, and they take too long to sell. Set a budget and stick to it so that you don’t overspend. It is better to sell out quickly than have unsaleable products taking up valuable space.
• Underestimating total costs. Before you buy, be sure you know what you are paying for. The price of a pallet will not normally include the shipping, so make sure you know how you are going to provide transport and add in the cost.
• Choosing the wrong supplier. There are plenty of companies that claim to be liquidators, but some are more dependable than others. Some, in fact, will be offering stolen or counterfeit goods, so you need to see the appropriate documentation to be sure the goods are genuine — import permits, invoices, or certificates of authenticity. Buying incorrectly can damage your business and cause legal problems.

Always make sure you deal with an established and reputable business, such as here at Quicklotz. We only sell genuine products from well-known brands, and we provide accurate, comprehensive descriptions and clear images of everything we sell. We are open, honest, and transparent in all our dealings, so you can buy with absolute confidence. We will also provide all the support and advice you need, so get in touch to find out how we can help your business to grow.