Liquidated merchandise refers to inventory items that are surplus to the company's needs and are being disposed of at a low price, so they are acquired quickly. This merchandise may be of different types and is being disposed of for a variety of reasons:
- A company may be going out of business, or one of its stores may be being closed or relocated. Consequently, the complete inventory of the company will be sold off to raise cash to pay its debts, or a store’s shelves will be cleared of stock. All this stock, therefore, will be new and unused.
- Overstocks refer to items that are selling slowly or not at all, that are discontinued lines, or may be seasonal items that need to be cleared when the season ends. These brand-new items are disposed of to make space for other inventory.
- Customers may return items because they are defective in some way, have minor damage, or may simply be deemed unsuitable or not required for various reasons. Rather than having to process and repackage these items for sale, companies often offload them as liquidated merchandise, although they are still available with a warranty. It is estimated that over 30% of items bought online are returned to the retailer.
Advantages of Buying Liquidated Merchandise
Whatever the reasons for merchandise being liquidated, there is a huge opportunity for retailers to obtain large quantities of quality products at well below wholesale price. The main aim of liquidation is to offload large quantities of goods quickly, and so prices are set low to ensure this happens.
Being able to buy these products offers several advantages:
- A huge range of products is always available, so you will always be able to find some that are suitable for your business.
- Due to the need to move large quantities of products quickly, prices are always set below normal wholesale levels and are extremely competitive.
- The low-cost prices enable selling prices to be set correspondingly low, allowing great benefits for customers while still allowing high profit margins to be obtained.
- Merchandise can range from brand new products, in original packaging and unopened, to items that have had some use or may be defective in some way. However, this is reflected in even lower prices.
Potential Problems when Buying Liquidated Merchandise
Buying liquidated merchandise is not without risk, and you need to be aware of what you are doing. You need to be sure that whatever you are buying will sell, so you must assess the market to determine the likely demand. You don’t want to buy surplus products and then find a lot of them are left unsold.
It’s vital to know your market and understand what your customers want. Then, you can obtain the most suitable products and tailor your marketing to achieve the best return. Various sales channels are available, including online platforms such as eBay and Amazon, so you should be able to reach a wide audience.
Assessing the quality of the goods you buy is often your main challenge. Trying to sell inferior products will result in a high level of returns, numerous customer complaints, and a failure to establish the required level of trust with customers for a long-term relationship. You shouldn’t have problems with goods that are new, unused, and in their original packaging. However, if you buy a batch of unsorted customer returns, you will get them at a lower price but will have more work to do.
Returned products will need to be checked individually, may require remedial work and could need repackaging. It’s important, therefore, that you have as much detail as possible about each lot you plan to buy and are fully prepared for what you receive.
Ensuring Success in Reselling Liquidated Merchandise
The benefits of buying liquidated merchandise far outweigh the disadvantages and allow you to make high volumes of resales and achieve high profitability over a long period. But this will only happen if you prepare properly and are thorough in what you do.
As is common today, there are plenty of thieves and scammers who are happy to take your money. This applies as much to liquidated merchandise as anything else, so be sure you only deal with a reputable company that has good, independent reviews and is one you can trust.
At Quicklotz, we are a reliable and well-established business that operates in an open and honest manner. We will give you as much information as you need about everything you buy, so you will never be surprised or disappointed. It’s in our interest that you succeed, so contact us if you need assistance or advice. We’ll be happy to help.
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