Buying Salvage Products and Selling Their Individual Components at Profit
If you sell liquidated products to your customers, chances are that these people are also looking for individual components from products. Therefore, when you come across products that are not in working condition or are defective beyond repair, it is a good idea to buy them for a cheap price and sell its component parts for a profit. However, because the liquidation industry as a whole is very wide, you must carefully consider the products that you should buy and the way you should sell these spare parts or components. The following comprehensive guide will take you through the process of buying salvage products and sell individual components for profit.
Buying Merchandise for Spare Parts
Understand the Demand
First off, it is crucial that you research the market and your target audience and figure out which spare parts or components are in demand. This will depend greatly on the ages, gender, and professions of your customers. If you have clients who do not want to spend time in buying spare parts and making something out of them, you will not be able to sell the products you have invested in. Therefore, if you want to get a good profit for your salvage products or their components, make sure that you know exactly what your audience is looking for.
Know the Estimated Costs
Not only do you need to know your budget for buying salvage products, but you should also consider some other costs as well. For example, the ordering cost for the merchandise will include preparing a requisition, purchasing the order, receiving slip and finally issuing the payment. In fact, apart from the cost, you will also have to think about the time that you will need to invest in buying the items and going through the entire process. In some cases such as Televisions, Smart Phones and Video Game Consoles you may require an investment of specialized tools for disassembly. Furthermore, you should consider the actual time and labor involved in product disassembly. Once you have figured out the costs and time, you will be more relaxed when you buy the merchandise.
Search for Reliable Sellers
One of the most important things which you will need to do is search for and find the best and most professional vendors or suppliers of the industry. This can be an especially challenging task because there are a lot of online and offline shops selling the products which you require. Here are some of the basic characteristics which you must lookout for while striking a deal with any salvage products seller.
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Experience: It is crucial that the vendor have ample experience. Do not just ask the person how many years he has been in the industry. Carry out thorough research or a background check as well. However, beware of fake information because even though you will find a lot of valuable data on the internet, there are a few websites that publish without carrying out proper verification. With experience comes inherent value that can be applied to product age, demand and cross reference. Meaning for example, certain circuit boards or logic boards from the same manufacturer TVs may be able to be used in other models of the same manufacturer. This creates an added value for certain models with high cross reference applicable parts.2.
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License and Registration: Another important factor which you must search for in your vendor is their license and registration. No matter how good the deal may sound, make sure that the supplier is reliable and reputable. Finding such providers will help you because these will be the only ones who will provide you with products that have good spare parts which can actually be used by your customers.
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Price: When first considering a few prospective suppliers, you also need to compare prices and decide which one is the best option for you. You will be surprised to know that the price and quality of products will vary from vendor to vendor. Therefore, it is important that you research extensively before choosing a supplier. Higher quality goods that are more complete will obviously cost more, however, for example, a cracked display TV may have a higher shipping cost that will affect the overall bottom line. You most likely will have to pay to recycle the cracked display, and offset these costs with the part harvesting, however, does the extra cost of shipping the screen outweigh the overall benefit of parting out the remaining parts?
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Reviews: Finally, when looking for a reliable, professional and experienced vendor, you must spend some time in searching for and reading reviews about them. Because you will find a range of information on the internet, you will also be able to find reviews and testimonials about the stores or people that you are thinking of buying from. Due diligence through verifying the vendor through a Dun & Bradstreet report, Better Business Bureau and even simple online forums/review sites can help save you time and money with some simple research.
Once you are able to find a reliable source for your salvage products, you can move ahead to the next step.
Analyze the Equipment
If you are thinking of buying several lots or pallets of salvage products, make sure that you analyze at least a few pieces of equipment from it. Even though you may not have the time or energy to check each product individually, you must randomly pick out a few pieces from the lots and check them thoroughly to make sure that the spare parts will be able to provide your customers with what they need. If you find a few minor things during the inspection but still want to buy them, try to negotiate with the vendor and try to get a lower price.
Take Time and Buy
Last but not the least, always take your time and carefully consider the investment which you are going to make. Do not make the mistake of purchasing anything too quickly or else you may end up making a deal with someone who is not an expert in the industry. Even after you think that you have a good vendor, take at least a couple of days before you buy anything. You will also do yourself a favor by talking to an expert or someone who is familiar with the field as this will help you in knowing more about salvage products as well as the spare parts which you need to sell to your customers. So now that you are aware of all the things you should consider when buying a salvage product, move on to the next section to discover how you can sell the components for a profitable price.
Selling Individual Components
If you want to sell the spare parts for a good price, there are a few very important steps which you must take to ensure that you are doing the right thing.
Make Sure You Sell Quality Products
The first and foremost thing which you must do is to make your business unique and different. To do so, you should offer quality products or spare parts that your customers will want to buy. Even though people are always looking for low cost alternatives, providing them with quality components for a reduced price will show that you can compromise on the price but not the quality. If you have thoroughly thought through your buying process, you will be able to get through this with ease.
It is a wise idea to make sure you have a “test bed” unit, which is essentially fully functional items in which you can swap the parts that you are harvesting from salvage product to ensure it is functioning properly. This extra step can increase returns exponentially, however, selling salvage parts in untested condition may also yield returns for consumers willing to take a risk or perhaps looking for component level parts off of the salvaged piece.
Identify Your Target Market
Even though your liquidation business will already have customers and a specific target market, you must make sure to directly target the high volume customers interested in spare parts. Some people who will be interested in what you are selling are technicians, repair companies/shops, and fleet operators among other professionals. If you know and are aware of the target market, you will be able to run a marketing campaign accordingly as this will increase your chances of being found. For this purpose, it is important that you carefully analyze your audience and discover what they do and do not like. The decision made here is to focus on selling high volume lots at lower profit margins, or individual lots to end users at higher profit margins.
Have a Marketing Plan
If you are planning to keep spare parts as a big part of your business, you must have a marketing plan which will work on your target audience. If selling individual components is one of the categories of your business, make sure that you have a separate marketing strategy for it as well so that your customers can learn about it and buy products from you. Remember: the best strategies are those that are not forceful but convincing. Therefore, if you want spare parts to sell, you must have a well thought plan. In the internet age with a wealth of information offered online, consumers are becoming more and more brave to venture into trying to repair their defective electronics on their own. Additionally, many community colleges and technical school are looking to gain work placements for students to learn these trades. Marketing to these new groups can help reduce costs as well as increase profits.
Clean the Components You Want to Sell
Next, if you want the components to attract your customers, make sure that they are kept clean and shiny. If you are thinking of selling sensitive parts, you must learn how to clean them properly or else you will end up destroying the equipment. It would be best for you to check the methods of cleaning online and follow the instructions carefully so that you know that you are doing the right thing. Do not make the mistake of using solvents on the parts as this may damage them. End product makes a BIG difference, and presentation is key. Make sure exposed circuit boards are properly stored in anti-static bags.
Take Well Defined Pictures
One of the most important things that will really make your products visible to your customers is the pictures that you put up. Ask any seller and they will surely tell you that putting up images along with the listings will generate a higher amount of views from your buyers. Especially focus on taking pictures from every angle so that the customer can view the true condition of the spare parts. However, it is important not to overwhelm the clients with too many pictures or else this will distract them. This is also important to ensure that the customer is able to compare the defective part that they have will indeed be an exact match for the replacement part they are purchasing from you.
Have an Easy Website
As a liquidation business owner, you must make sure to make it convenient for customers to order and buy products from you. This is why it is essential that you do not only focus on the quality of your products, but also your website and social page. The easier and more convenient your finding and ordering process is, the more your chances of getting noticed and making profit will be. If you really want to impress your customers, you can also make your web page customizable to tablets and mobiles.
That way, your clients can browse and order what they like wherever they go. Another HUGE advantage that customers love is having a support and how-to section right on your own webpage where commonly asked questions, and as well as suggested tear down and replacement procedures can be hosted. This improves the overall customer experience, as well as saves you time and money by having a common area to refer to for frequently asked customer questions.
Decide on the Price
Before you start to sell your product, find out the ideal price. Do not just think about the price which you originally purchased the spare parts for; add the shipment and other costs, along with the time spent on the buying process, dismantling, testing and repackaging. Deciding on the price will also require you to do a little bit of research online so that you can learn about the average price of the industry. The price is a very important factor and will decide your profit or loss in the business. This is why you must carefully weigh the pros and cons before implementing it.
Pay Attention to Product Details
If you want to sell the spare parts for a good price, you must make sure of having a good product listing or details. The product description that you write must be detailed and well written so that your customer knows exactly what they are getting into. Remember – even though the description needs to be precise, you should not miss out any important details as this is something that the buyer will want to know. Things like the dimensions and weight of the product are essential so do not leave them out when writing the description.
Offer Several Delivery Options
Another feature that will make you and your product seem more appealing is that of offering a range of delivery options. For this purpose, you must have a deal with several companies. As a result, your customers can decide which is the most feasible for you. You should also provide a same day delivery service to those who live near your business, as this is very important for people looking for urgent spare parts. You can also offer collection points for clients who order online or by the phone so that your products can be promoted.
Provide Exceptional Customer Services
Even if you are providing spare parts or components, an exceptional customer service is essential if you want the customer to be satisfied with his/her purchase. Make sure that you are connected to your clients through phone, email, and social media as these are the top media which your customers will speak to you. Answer questions precisely but do not make the mistake of being rude or else the same customers will spread bad word of mouth about your bad services. When you own a liquidation business, it is important to have several things to sell to your clients. Salvaging products for their spare parts will prove to be very lucrative, especially if you follow the buying and selling tips discussed.