A GUIDE TO BUYING RETURNED AND EXCESS MERCHANDISE

What to look for when sourcing returned an excess merchandise.

(aka: how small store owners and resellers can bank on the busts of retailers and manufacturers)

Around $440 billion worth of merchandise is returned each year – a lot of which can’t go back on the shelves. But one retailer’s headache is another’s opportunity, and for online sellers, independent retailers and resellers, there has never been a better time to source returned and excess merchandise on the secondary market.

So, how do you navigate the secondary market to successfully sift through the bad and the ugly to get to the good? Here are some tips on what sellers should look out for when sourcing customer returns and excess merchandise:

 

It’s best to buy directly from the source

By purchasing directly from the retailer or manufacturer you can assume that there is no middleman involvement and no price mark up. Historically, it has been difficult for small to medium sized buyers to buy excess inventory directly from large retailers and manufacturers; however, today there are new, efficient systems that automate the manual work otherwise required for them to sell to larger buyer groups.  One such tool is an online auction marketplace platform. These marketplaces provide a level playing field for all buyers to compete for the inventory, and they enable a direct relationship with the source via a transparent platform. Because they eliminate all negotiation over price, it is just as easy to have thousands of buyers involved as it is to manually sell to just a handful.

 

Source online from reputable sellers

Independent retailers, online sellers and resellers can often source inventory more affordably and efficiently by tapping into online auction marketplaces that sell returned and excess merchandise. There are numerous benefits to sourcing this type of product online including: greater product availability, detailed product descriptions, bulk quantities at your fingertips, shipping options, and a quick sales cycle. The key is to make sure you are buying from a known brand: many top retailers like Wal-Mart, Target, Costco and Best Buy have their own liquidation marketplaces while others leverage multi-seller marketplaces like B-Stock Supply or Liquidation.com. In the case of multi-seller marketplaces, be sure to use one that has a seller rating system, so you know you are buying from a reputable seller.

 

Purchasing inventory via these online-auction liquidation marketplaces can be a great way to secure inventory at an affordable, in some cases rock-bottom price, ensuring a better profit margin for you.

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Secondary Market, the Road to Profiting in Wholesale

Every year over half a million businesses are created in the United States.  Approximately one third of these start-ups are retail businesses.  A large portion of these businesses will focus on the “Secondary Market”. This marketplace offers great advantages and high rewards but you need to be well prepared.  Finding the right supplier to source products from is critical.

Secondary Market products consist of Closeouts, Surplus Goods, Customer Returns, Liquidated Items, and any product that is not sold after its initial manufacture. Many companies specialize in secondary market purchases and reselling.  Resellers might experience some level of unsellable merchandise in these types of wholesale orders but not always.  Retailers will be hard pressed to find a cheaper source of merchandise than secondary market items and these products can be a great way to turn a profit.

Working within the Secondary Market is more than knowing just your product niche; you also have to know how to sell products with a variety of quality conditions.  Getting creative is essential for moving not only the good products but also the less desirable ones.  A good strategy is to start small by purchasing a few pallets and working your way up to buying full truckloads.  If buying smaller loads is an obstacle, you might need to consider your source. Remember, where you get your products is just as important as what you get, especially when sourcing surplus goods.

To gain additional insight into this industry we spoke with Michael Lawrence of DirectLiquidation.com.  His company represents one of the fastest growing marketplaces for Surplus Merchandise.  

In the past, online liquidators pawned off “as is” and “salvage-grade” merchandise to buyers as the best value available in the wholesale marketplace. Product misrepresentation, low-grade items, and a narrow assortment of tier-2 or 3 brands were commonplace. The ability to purchase small loads or retail-ready products was virtually unheard of. In addition, if you were “lucky” enough to win one of their auctions you could expect a further 7-15% “buyer premium” charge for the privilege of buying their junk inventory. – Michael Lawrence

Michael went on to explain how Direct Liquidation can solve these problems, they offer buyers an incredible range of products, tier-1 brands sourced from their exclusive relationships with top national retailers and manufacturers.  Smaller loads are available so buyers can test customer demand without depleting resources.  Having an ability to test demand could be the difference between a good bottom line and a bad one.

Large liquidators buy huge volumes of surplus merchandise and returns for literally pennies on the dollar. They process and sort this inventory and make it available to the smaller buyer. Generally liquidation lots are sold “as-is, meaning there is no guarantee of lot quality and usually no return on purchase. Understandably, this comes with the deeply discounted prices on these lots, typically well below wholesale. But “as-is, doesn’t necessarily mean poor quality.  Frequently a large portion of the inventory is in new or like-new condition.  Fact is, buyers can and do make a healthy profit reselling this merchandise.

Secondary Market Wholesale Products

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Hot Vapes – over 135 tasty flavors!

2016 showed incredible growth for the Vaping Industry, huge actually!!

Today we are focusing on one company that has become a go-to source for many vape retailers, Hot Vapes.  They offer over 135 tasty flavors and test their nicotine to ensure it’s purity.  Crafted at their labs in Chicago Hot Vapes distributes a wide variety of e-Cigarettes, vaporizers, mods, clearos, tanks and accessories to vape shops across the US.

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GetThatWholesale launches new VAPING Category

If you haven’t heard by now how popular Vaping has become, you might want to start getting out a bit more. The industry has growing in leaps and bounds, so quickly in fact that Vape Product Suppliers can no longer be tossed into a generalized Smoking Products Category, this industry has outgrown itself.  It’s an industry that is raining down revenue to those lucky to be involved.

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2017 Economic Forecast…Looking Good :)

Happy New Year and welcome to 2017!!!

Some good news recently projected by Forbes shows a promising future year in sight (hopefully)

“Increasing employment, accelerating wage growth, and improving consumer sentiment, cumulatively result in the perfect formula for increased consumer spending/retail sales, which accounts for approximately 70% of U.S. economic output.  The Conference Board’s […]

Flip it…and Get Organized!

 

Live in Flip Flops Launches a New Flip it Calendar

Just in Time for Spring; Flip it…and Get Organized!

 

Northeast Florida business owner, Lou Ann Davis, has just launched a third calendar in the Flip it series;  Flip it…and Get Organized – Tips to Lighten Your Load and Flip Your Day!

 

Similar to the first two “perpetual” calendars in the Flip it series, Flip it…and Get Organized is bursting with 366 daily messages and can be enjoyed beginning ANY day of ANY year. What makes this Flip it particularly unique is the focus on one area of the home each month, offering cost-conscious, time-saving tips such as “Razor blade sharpness will last 10 times longer when blades are dried thoroughly after each use,” “Place an old bookcase in a closet for instant shelving,” “When loading the dishwasher, group forks, knives and spoons in the same compartment, making unloading utensils a snap,” and on July 3rd, “The power of a list is not that it reminds you of what needs to be done, but instead, it frees you to forget.”

 

Each Flip it…and Get Organized includes a built-in easel stand and can be adorned with a miniature flip-flop charm, adding a colorful dimension to this daily “de-clutter and get-organized” guide.  These signature charms can be custom-made to match a particular décor or add a pop of color to signify your favorite team or school.

 

Flip It Calendar!

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Batten down the hatches – Black Friday is coming!

Some are starting to smile while others cringe…here it comes again, Black Friday.

Referred to as the creme de la creme of buying and selling, and it’s only a week away.

Adobe’s Digital Index shows that last year’s Black Friday set the bar high, with consumers spending $2.4 billion online, an almost 24% increase from the prior year. This year, according to some estimates, that spend line is increasing even more. Especially with e-commerce continuing to grow in the double digits, something it has done for several years in a row now.

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Small Business Saturday is Coming!

November 28th is Small Business Saturday.

Small Business Saturday is an American shopping holiday held on the Saturday after US Thanksgiving during one of the busiest shopping periods of the year.

First observed on November 27, 2010, it is a counterpart to Black Friday and Cyber Monday, which feature big box retail and […]

Splatter campaigns don’t work

Has your company ever received an email about something completely foreign to your business? Let’s say you specialize in providing a service, maybe a great new system to quickly keep track of product inventory. That’s it, this service is all you do, nothing more or less. Your world revolves around providing this great new inventory tracker to businesses. Your website includes an about us page clearly talking about your love for this inventory tracking service and how it is your sole driving factor in today’s market. So why would you receive an email from someone asking if you need a better way to transport your products? Or another email offering a service that will photograph your products for online promotion? Or, another inquiry asking if you have the right packing materials for shipping your products? None of these are services you can use, a simple glance at your website would tell any would be sender this, so why are you getting these anyways?

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Get up early and head over to the Flea Market.

Flea Markets! Flea Markets! And more Flea Markets!

Flea Markets and the wholesale industry go together like peanut butter and jelly.  There is an enormous vendor population that derives their goods directly from wholesale suppliers. This relationship has continued to grow more and more over the last decade.  Many consumers have taken to […]

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