Last Updated on August 27, 2022 by rida
If you want to get into the liquidation industry and start your own liquidation business then you need to know some things. Today, we have collected 5 things that you need to know or rather you don’t know about liquidation sales.
So, for more profitable deals or to buy liquidation pallets and start dealing with liquidation stores and it might be a good idea to know these things beforehand so that you can make good decisions.
Table of Contents
You Can Find Good Value From Certain lots
It might seem that liquidation sales and liquidation pallets just have a bunch of poor-quality products but that’s not always true. You can find some items there if you know what you are doing. Research is the key here.
You don’t want to jump into it without any info. There are many good value lots where you have items that have good market value. Many big companies often try to make space for new items and sell the old ones off at a lower price.
This means you get some good stuff at a very low rate. Read reviews and talk to people who have used the liquidation store or bought from companies that you are interested in buying from.
This way you can often score items where you can make a good profit. So, invest more time in research and you will get some really good lots with a bunch of useful items of good value.
Amazon, eBay and Many Big Companies Liquidate Merchandise
Many big companies liquidate their stocks. You might be under the impression that unknown companies that want to get rid of bad products are doing liquidation sales. But that cannot be far from the truth. Some of the biggest e-commerce giants are liquidating their stocks regularly. Many liquidation stores often source their merchandise from these big companies.
Amazon, eBay, Walmart, Target etc. are some of the big names in this business. Though Amazon and other similar companies are often quite efficient and effective with their delivery process there can be mishaps.
Once a customer gets a wrong item they will likely return it. This returned item will most likely not be put back on the shelf but rather put on the liquidation stock. Similarly, for companies dealing with millions of products, warehouse space is very important.
You have to be conservative as to what you want to store. That’s why when an item is not selling or has been overstocked instead of holding onto it the companies just liquidate it at a cheaper price.
There Are Bad Lots
We know we have been mentioning that some lots are of good value. Many videos and articles are documenting the fact that many people have made decent profit in the liquidation business. This may often overshadow the fact that there are bad products that are being liquidated. Many companies often liquidate damaged or used products that are not sellable.
Thus, when you buy such a lot you are most likely going to lose your money. Don’t be afraid to get into this business though. We are only mentioning this because you have to be careful as to which liquidation store or merchandise you are hedging your bets on.
You can never be 100 percent sure as to what you are getting. That’s the way the market is. But you can get a pretty solid idea if you do your research. Only try to pick lots that have unopened items and come with a pamphlet listing the probable items in the package.
It Can be Profitable – Sometimes by a big margin other times not so much
Another misconception that may be floating around due to the articles and blogs talking about big profits is that you can make a lot of money doing this. But that’s far from the truth.
Anu business has the potential to earn you a good profit but most of the time, especially in the beginning it is kind of good to just break even. Your focus should be on not losing money instead of trying to go big.
You can make the big plays and take on risky lots once you have enough capital to spare for such investments. In general, you will make some profit per lot which should help you build some capital to buy bigger and better lots.
Initially, the focus should be to find the right supplier for your liquidation business. You should focus on making a profit but don’t be blinded by the notion that you can make a lot of money. Just build good relations with wholesalers and suppliers and try to score the best lot in your budget.
Focus on Unopened or New Lots
Even though many lots that have unopened or new items possibly from shelf-pulls and overstocks may have a higher price tag you can still end up getting more value from them than much cheaper lots.
We suggest you only buy liquidation pallets with quality products and boxes that contain unopened items. This way you will reduce the chance of getting damaged or broken items. So, trying to score for safer options can often be good.
So, that was our list of 5 things you didn’t know about liquidation sales. These are just tips. A couple of them sort of paint the industry negatively but that’s just something to be cautious about.
Every business has risks and if you are aware of them then you are going to make better decisions. Do your research, talk to experienced people and be conservative with how and where you spend your capital. That’s it from our side. We wish you all the best.