Stocking a Discount Store the Right Way with Surplus Merchandise

If you ask a number of market analysts and people dedicated to developing business strategies, working with surplus merchandise for personal use especially is a risky step to take. However, if you are looking to run a resale business, buying wholesale merchandise by the pallet or a wholesale lot can have a positive impact on your business.

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Such merchandise can be a real game changer for someone who is running a discount store. The reason for this is that it offers many benefits, the most important of which is the higher profit margin you get to work with.

However, you have to keep in mind that the market is changing constantly. This can make it very hard to adapt since large quantities of merchandise you bought from a wholesale supplier could remain unsold for longer periods of time, bringing no profit.

However, if you are smart, you can get deals with wholesale suppliers that will benefit both sides. Or, you can also look for a different source to the one you are using currently, and maybe consider liquidation websites in search of your stock.

Wholesale Business is Growing, Take Advantage of it

Wholesale business is growing constantly with the U.S. wholesale distribution industry having around 400,000 establishments that have combined sales of $8 trillion per year. This means that for every product there is a wholesale supplier, you just have to look for the right one.

In order to make wholesale suppliers work for you, there are a few steps you need to take. Doing some research online is the best way to find as much information as possible about wholesale suppliers in your area and online. A number of large companies will have units strategically placed across the country to cater to the customer’s demand. When you find the supplier that you are comfortable with, it is time to go through all the products and services they offer.

Buying merchandise through a wholesale supplier comes with a couple of upsides. You can buy in bulk for resale, meaning you will be stocked for a reasonable period and won’t have to keep purchasing constantly. The second advantage is the price, which is obviously well below retail.

However, since wholesalers themselves buy merchandise either from manufacturers or retailers that are getting rid of overstock pallets, they will want to make some profit off reselling these items. Therefore, you need to make sure you know the retail prices of the products you intend on working with. That will tell you if a wholesale pallet is worth buying.

However, the fact that wholesale suppliers are looking to make a profit on the merchandise they sell means they are buying products at prices below what they are offering you. So could you be getting the same benefits if you switched your source? The answer is yes.

Over recent years, liquidation auction sites have gained in popularity for a number of reasons. One of these reasons is that they act as a bridge between retailers who want to sell their surplus merchandise and the smaller buyers looking to buy pallets of such merchandise to resell online or to stock their discount stores.

So, to understand the benefits such a source, as well as surplus merchandise, can provide you, you have to understand the source of the merchandise, and what surplus merchandise actually is.

What is Surplus Merchandise?

There are several types of merchandise that retailers consider surplus merchandise or B stock. Retailers, especially the top-tier ones such as Amazon or Walmart have a huge throughput of merchandise, which can have ‘negative’ consequences such as not selling all the merchandise in a season, or having a certain percentage of merchandise returned.

This is especially the case with online purchases due to the inability to try out products. Some products get damaged in transport, sometimes the buyer changed their mind or simply get delivered the wrong product. In any case, the products get returned for various reasons.

Once returned, no matter the condition, the merchandise has to be sold through other channels and is considered surplus merchandise. Because now it takes up space in the storage room that can be used for incoming merchandise, retailers are eager to sell that merchandise on.

But it is not only customer returns that get this treatment. This is also the case with shelf pulls and overstock pallets of merchandise. The first type is basically explained by its name. This is merchandise that was displayed in the store but was not sold before new models arrived. This often happens with seasonal merchandise and electronics where new models and products are manufactured almost on a daily basis now.

Overstock merchandise is slightly different. These products are often the result of a shift in the market demand or bad judgment by the management that ordered surplus products. Whatever the reason, these products sit in the warehouse and don’t even make it to the showroom floor.

What these products have in common is the fact that, unlike the majority of customer returns, these are brand new items.

How does Surplus Merchandise Benefit Me and Where to Buy it?

Now that you know what surplus merchandise is, you should look into the benefits and where to buy it. The first and most important benefit is the price. As you are avoiding wholesale suppliers, you are buying merchandise at prices below wholesale. This means that even at your discount store, you can secure a healthy profit with such merchandise.

The second benefit is that, with the throughput, we mentioned earlier, you rarely run the risk of being out of stock since retailers handle so much merchandise.

Now, where to buy this sort of merchandise is the most important question. As we mentioned, liquidation auction sites have been gaining in popularity over the recent years. Retailers such as Walmart and Amazon have taken notice of this trend and are now using these platforms to run pallet auctions on these sites.

This means that you can find Amazon return pallets on liquidation websites at significantly cut prices. And you can do this from the comfort of your home and enjoy other benefits of buying merchandise. One of them is the possibility of using the distribution centers nearest to your location, eliminating in some cases the delivery costs completely.

In terms of quality, there are certain things to consider. Customer returns lots can contain used, or even non-functioning merchandise. But if you are looking to provide top quality to your customers, you can always look into the manifest provided with each pallet. This is a packing list showing you the type, the quantity, descriptions and the quality of the merchandise you intend to buy. This way you can only buy what you want, or what your customers demand.

Direct Liquidation is a goTRG company.

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Henley Johnson

Henley currently works as a sales representative for Direct Liquidation, assisting businesses with product sourcing of liquidated merchandise from the largest retailers in the world. Whether you are looking for a pallet or a truckload Henley is here to help you grow your business.

View Henley’s Bio on YouTube.