Buying Pallets of Customer Returns? What You Need to Know about Shipping and Storage

If you buy pallets of customer returns from liquidators such as Direct Liquidation, here’s a breakdown of what you need to know about shipping and storage.

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Section 1 – Shipping

The Four Types Of Freight

When it comes to buying merchandise wholesale with the intention of freight shipping them to a location of your choosing, you have four options – sea, air, road, and rail. Which type of freight shipping method you choose very much depends on where in the United States your business is located.

If your business is located in the east of the country, you might want to consider transit by ship, as there are a network of inland waterways connected to ports such as Baton Rouge, Houston and New Orleans that connect up with inland ports such as St. Louis and Memphis. Shipping freight by container ship can be a very cheap method of shipping, so it’s well worth bearing in mind if you’re located in that area of the country.

Those in the west should consider rail or road freight, as water links are poor to non-existent in that part of the country. Many shippers combine the two types of freight – rail for the longest part of the journey followed by truck transport for the shorter journey.

If you need to ship your stock purchases quickly, air is the fastest method, but remember to bear in mind that it is also by far the most expensive.

The Cost of Shipping

There are a number of factors that will affect how much it costs your company to ship the customer returns you purchase from liquidation auctions. These will include factors such as the type of container you’re shipping (full (FTL), partial (PTL), less than truckload (LTL), the cost of the fuel used, your shipment’s weight, how easy your shipment can be loaded on and off ships, trucks, planes, and trains, any tariffs that need to be paid and any special requirements your shipment might have such as refrigeration.

Road Freight

image via: uship.com

If you’re shipping from a liquidator, you’re most likely going to be shipping your goods by road. Road freight is separated into three categories. They are as follows:

Less Than Truckload (LTL)

LTL loads usually weigh between 200 and 10,000lbs. LTL loads are loads that do not fit an entire truck, and they are usually transported along with other LTL loads destined for a number of customers.

Partial Truckloads (PTL)

Unlike LTL loads, PTL loads don’t move around very much in transit, and don’t tend to come under the same strains and stresses as an LTL load. PTL loads also don’t fill an entire truck, but they are classified differently from LTL loads in the fact they’re classified more for the way in which they’re transported than for their weight or size.

Full Truckload (FTL)

FTL loads fill a whole truck and typically weigh between 34,000-45,000lbs. You’ll need to check out what your maximum weight allowance is, as they vary from state to state.

Preparing Your Shipment

There are a number of factors to consider when preparing your liquidation sales shipment for transit. Firstly, make sure your packaging is suitable. LTL loads, for example, tend to get more movement around during shipping, meaning they’ll come under more stresses and strains than PTL or FTL loads.

Picking the right type of boxes and pallets that can take your shipment’s weight is vital to protect the customer returns you buy from a liquidator from harm during transit. Pick the wrong one, and your shipment may suffer damage and precious goods may be unsellable, leading to a decrease in profits.

It’s also very important that loads are stacked correctly. Avoid overhanging loads; instead, you’ll want to align your shipment as close as possible to the width of the pallet to reduce the risk of toppling and damage.

Other Factors

As well as all the above, you’ll have to take into account the following factors when shipping freight when you buy wholesale from a liquidator:

Bill of Lading – All shipments must be accompanied by a Bill of Lading. This is a commercially-available document that provides you with evidence that your shipment has been received by your chosen courier. It’s a contract of carriage and also a guarantee by your courier to deliver your shipment to your destination of choice. A Bill of Lading is a compulsory document.

Insurance – Make sure to take out suitable cargo insurance to make sure you’re covered if anything goes wrong.

Ambient conditions – ‘Ambient conditions’ refers to the conditions under which your shipment will be transported. Shipments come under all sorts of strains and stresses during transit, and these must be taken into consideration. You’ll want to make sure you have everything in place to combat ambient conditions such as the correct boxes, the right strength pallets, the securing of your load by means of straps, wraps, anti-slip mats and the like.

Labeling – Make sure your shipment is correctly labeled. This will ensure that you receive the right load by making it easier for your courier to identify your shipment.

Consolidation – Consolidating your load means packing it into as small and as light a space as possible to reduce costs. Try to fit as much of your load into the smallest available space, and try to use lightweight boxes and pallets where possible.

Tariffs and liabilities – Remember to ask your supplier for a carrier rules tariff document and your carrier’s terms and liabilities in case you need to seek legal redress should anything go wrong.

Learn more with our Ultimate Guide to Freight Shipping for Resellers.

Section 2 – Storage

When it comes to storing the wholesale merchandise you buy from a liquidator, here’s what you’ll need to consider:

Do you have enough space? The more storage space you have, the more goods you can store. The more goods you can store means the more goods you can sell in a quicker amount of time, and that could increase your profits.

If you don’t have enough space, you might want to consider renting space. You’ll have to take into account how much renting costs, of course. If the rent is too high, the cost will eat into your profits, so this must be taken into account when doing your calculations.

Some shipping companies provide storage, which may be a short-term solution until you find warehouse space or a property of your own to store your goods, but it should not be considered in the long term as shipping company storage space is usually very expensive.

You’ll also have to consider any state or local taxes you’ll be liable for should you decide to rent or buy a property. If you do, you’ll also have to consider whether to rent or buy one centrally-located storage space, or several smaller spaces depending on your company’s size and the range and area your goods are likely to be shipped out to.

Of course, most small business just use garages and lockups to store the goods they buy from liquidators, but there’s no harm in thinking big and putting into place plans to expand in the future.

Hopefully, this guide has given you an overview of shipping from liquidators and storing the goods you buy. For a more comprehensive view of the shipping process, check out our Ultimate Guide to Freight Shipping for Resellers. For more tips on storage, sales taxes and a whole lot more check out more of our blog which contains a wealth of information for buyers of wholesale customer returns.

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.

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