A Guide to Reselling Closeout Merchandise

Whether you are working as an internet reseller full time, or you are just looking to earn some cash on the side, you know that there are three components that are very important to your success in a very competitive market.

Firstly, you must price competitively. Selling merchandise at retail or higher than retail prices will certainly get you nowhere as single products on websites like eBay or Amazon are now hovering just above wholesale.

Secondly, you must sell merchandise of high quality. Whether your products are new, old, unopened or slightly used, you must offer high-quality products in order to appeal to customers that already have high-quality products on offer to them.

The third factor is customer support. Your business needs to be run in such a way that your customers want to return, time and again. You want to build relationships and trust. Building good reviews and loyalty is key to sustainability in an online business.

So, how do you achieve all three goals? This short guide will help you understand the market dynamics, the sourcing of cheap, quality merchandise and give you an indication on how to price your merchandise for optimum profit.

Understanding the Resale Market

As mentioned, prices of single products on global sales platforms are now close to what you can get them for wholesale, meaning the products are sourced either at the wholesale prices or below and sold on in large numbers.

Getting the right price is not all you have to do, Understanding the needs of a market is something that could be far more important.

With the emergence of the internet, more and more individuals jump on the opportunity to make money by selling products online from the comfort of their own home. This means that plenty of markets such as electronics can be rather saturated, and the competition is fierce.

To give yourself the best chance of making a real income, your goal is to browse the market and see where demand is not being covered by supply. In other words, you must find an undersupplied market, a niche segment that has healthy demand without many suppliers.

Maybe this means concentrating on certain brands of televisions, power tools or kitchenware. This means that there will be far less competition and not so much downward pressure on the prices. Subsequently, you pick a product, or a range of products, that you are comfortable with working with within that niche segment, then it is time to get to sourcing.

How to Find Cheap Merchandise Without Compromising Quality?

Once you have set your sights on a market and a line of products, the next step is to find an adequate supplier. By adequate, we mean you must search for a supplier that will provide you great service and quality merchandise at the lowest prices. Retailers are immediately off the list, so what is left is to look at the potential wholesale suppliers and the types of merchandise they have on offer.

The search begins with the product you chose to sell. This means you are looking for wholesale suppliers that can deliver the product to you, in bulk. Once you have isolated the wholesalers that can provide you the merchandise it is time to see whether they sell, customer returns, closeout merchandise, refurbished products or simply old, used stuff.

We want to focus on closeouts because this is something that could elevate your resale business to a new level.

When a shop is closing, or when it is looking to get rid of the seasonal items in order to bring in new products for the current or upcoming season you will find that they may be offering factory closeouts. This means that a lot of merchandise is getting sold at reduced prices that go far below wholesale, but the quality is not compromised, because these products are not faulty, they are brand new, just out of season.

This often includes a lot of clothing, or outdoors equipment, but also heating and pool equipment.

This is just the source you need in order to be able to resell competitively in the market. Again, you have to filter through the list of your selected wholesale suppliers and find the ones that offer these types of closeout merchandise, specifically, the products, brands or niche you are looking for.

It may be advisable not to strictly stick with one supplier. Although building a business relationship with a supplier can bring further benefits such as cost reductions or knowledge of their warehouses, and local delivery firms- you will want to ideally have such a relationship with a number of suppliers. You always want to make sure you always have one supplier who can provide you with the goods.

The main issues when choosing your wholesale supplier is their reputation and the services they provide. From the brands they work with, the quality of their merchandise, general availability of products and delivery options. This all weighs in on your decision. But once you have made one, it is time to sell your new stock.

How to Price Your Merchandise for Resale

The main advantage of closeout merchandise is the price/quality relation. You are getting top tier merchandise at prices below wholesale, which is very important once you reach the level at which you have to price and sell your products.

First, it is important to sort all the merchandise you purchased from your wholesale supplier. The presentation is key, so you have to take as many pictures of the product, from as many angles as possible, to describe the condition of the product. Often, in this case, these should be brand new items possibly with tags still attached to them.

The second thing you should do is look at the competition’s prices and to set your prices based on those. In an undersupplied market, the prices will be higher, and closer to MSRP, compared to a competitive market. This means that by sourcing closeout merchandise you are able to offer lower prices and remain competitive, whilst almost guaranteeing sales, and earning a healthy profit.

In the end, always keep in mind that you don’t have to return your investment with one big sale. Your profits are rather an accumulation of all the smaller sales you make from one wholesale pallet or a lot.

So with what you’ve learned, why not give closeout pallets a try today? If you have any specific questions, don’t hesitate to contact us for more info. 

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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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