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Getting a Return on Your Investment

Returned merchandise is big business and a tremendous opportunity for small retailers of every kind.  You get practically new, name brand products at unbeatable wholesale prices.

 

11% of all purchases nationwide are returned.  Customer Returns have created a billion-dollar industry for those who know how to flip these products into profit.  Many secondary marketplaces have sprung up to capitalize on the industry, they acquire refurbished and used items and then flip them back to businesses at almost cost.

 

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Hot off the press Retailers Trends Wholesale

Increasing Profit within the Secondary Market

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.  

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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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Can you tell the reseller from the authentic wholesaler?

Wholesale sources that are authentic can help you build your business rapidly.

These wholesale sources will have wholesale products that your customers will want, at prices that will allow you to make a profit.

After all, you can have the nicest wholesale merchandise but if the price is too high your customers will not buy it.

On the other hand, the lowest priced merchandise will not sell if the quality is very cheap.

To build your business your customers need to know that you can offer them high quality merchandise at below the going prices for it.

So if you are selling socks, and the current retail rate is $12 a dozen, you would want to sell the socks for below that price to attract customer attention.

But for this to work you would need to have high quality socks that are comparable to the ones being sold for $12 a dozen.

You can achieve this by dealing with authentic wholesale sources.

How do you make sure that a wholesale source is authentic?

For starters, make sure that the wholesale prices are not above the going wholesale rate.

If you see a wholesaler that is charging above the going wholesale price, chances are that he is only a distributor selling another wholesaler’s merchandise.

But if his prices are below the going wholesale rate you are more than likely dealing with an actual wholesale source, not a reseller.

Another tip to making sure that you are dealing with an authentic wholesale source is to see if the wholesaler offers lower prices for volume purchases.

Real wholesale sources will be happy to offer these wholesale price discounts because they know that their business is based on volume.

Wholesale sources are not concerned with the price per item, as with the total profit that comes from volume sales.

Lastly, check the wholesale source out. You can research wholesale sources by searching online for reviews and feedback that they have received.

At the end of the day, your experience with the wholesale source will be your best indicator for determining how authentic a wholesale source is.