How Should Lots be Cut and Developed

Starting a liquidation business can be extremely lucrative and gratifying. However, in order to be successful, you must always develop your lots properly and in a way that can increase your revenue by inviting in more and more customers.

Though the liquidation business has many aspects to it, its main focus should be the development of the packages that you are offering your buyers. This is why you must not only learn how to cut and develop proper lots, but also understand the process thoroughly.

Developing Liquidation Lots

When you first start your business, most of your time will be spent in deciding how you need to cut your liquidation lots. Even though this may require a considerable amount of your time and effort, the results will be worthwhile if you successfully pull off that task. Here are some of the things that you need to be careful about when managing and putting your lots together.

Know What Your Customers are Looking For

The first thing that you must do is know exactly what your customers are looking for. Thoroughly research the market and find out about the things that your particular audience is really interested in. For example, if you cater to the needs of teenagers and young adults, it would be best if you made lots that consisted of laptops, mobile phones and other such gadgets that today’s generation is most excited about.

However, though the internet will be your primary source for this kind of research, you should learn about demand by observing the general market and trends as you’ll provide you with the most hints.

Mix Products that are Similar to Or Complement Each Other

Once you know exactly what kind of lots and products your audience is looking for, you must make sure to mix the appropriate kind of merchandise together. However, this will only be applicable if you are selling UPC wide products, which are the ones that vary in brand as well as product.

If you are varying the products or categories, you should make sure that the merchandise is either similar or complements each other. For example, if you are offering hiking boots, you may want to include a backpack, flashlight, or other such items that will prove to be helpful for your customer. Don’t make the mistake of making UPC wide lots that have products that won’t be beneficial together because such products won’t be bought.

Keep the Price Range in Mind

One of the most crucial factors that you need to consider while developing liquidation wholesale lots is keeping the price range in mind. Carefully analyze the price of each of the lots that you are offering and determine if you will be able to generate sufficient profit from these.

Remember that even if you are just trying to get rid of a product by mixing it with others to sell both and rid your inventory of them, you still need to look at the overall profit and ensure that you are not losing money instead of bringing it in.

Learn from Your Competitors

A very good way to develop lots effectively is to observe and learn from your competitors. Even though you don’t want to be selling the same products as they do, it will be best if you know what category of products they are investing in.

Also, don’t make the mistake of only observing the actions of one competitor. If you don’t focus on all of the other liquidators in your niche, you’ll be missing out on something important that they may have, allowing them to get an edge over you.

Decide on UPC Deep or Wide Lots

Now that you know how to develop lots and the things that you need to consider, you must look into whether you want to sell UPC deep or UPC wide products. While UPC deep products are similar in every way, UPC wide lots are those that have a variety of different products or the same merchandise (e.g. cell phone) from several different brands.

The following section will tell you a bit about both of these lots so that you can make a better decision.

UPC Deep Lots

These lots come with a number of strengths that make them an ideal option.

Same Price Range

One of the main reasons why people opt for UPC deep lots is because they don’t need to calculate different price ranges. Because all the products will be the same, they can simply add the total number and multiply it by the price.

This will also make things easier for the buyer. For instance, if are thinking about selling a lot of iPhones, you wouldn’t need to calculate varying prices because all the devices would be sold for the same price regardless of their condition.

Consumers Show More Interest

Another reason why it would be beneficial for you to think about UPC deep lots rather than the wide ones is customer trends. Experts have noticed that customers are far more interested in buying lots that have the same product as compared to those that have varied items.

However, not all products will attract the same kind of attention. This is why you need to make sure that you are putting in something that is truly valuable for your customers.

Guarantee of Quality Products

When you buy the same kind of merchandise for your UPC deep lots, you will have a higher chance of getting quality products. Even if you find that some of the pieces are defective, these kinds of products often have the quality that you would only expect from refurbished or even brand new products. So, even though it would be best if you checked the items before you purchased them from the retailer or manufacturers, you will have some peace of mind knowing that most of the products are reliable.

Now as tempting as UPC deep lots may be, they do come with a few drawbacks you should be aware of.

The Item May Dry Up

A major setback that you may have to face is the drying up of the merchandise that you planning to sell. Liquidators who opt for UPC deep lots are often left confused because their supplier is no longer able to bring them the product that they were previously selling.

As a result, many businesses have to change and develop an entirely new strategy to accommodate new products that they haven’t worked with before. This is a crucial factor for liquidation companies because changing the entire strategy or plan to suit new products is not something that can be accomplished easily.

Your Consumers May Not Show Interest

Even if you offer what your customers want, what guarantee do you have of them being really interested in what you are selling? Maybe the teenagers that you were targeting decided to buy the iPhones and laptops from the actual retailers and not you? In such a case, you would be left with hundreds of lots filled with expensive and valuable merchandise that no one is ready to buy from you.

The Product May Lose Its Value

If you decide to sell only one type of product, you may experience loss as sometimes the market value of gadgets and other such expensive merchandise decreases. Therefore, even if you were selling the products for a good profit last month, its value may go down and you’ll have to bear the loss that has emerged because of it.

UPC Wide Lots

If you’d rather skip UPC deep lots, you can also go for wide lots, which usually contain the same item but from different brands and feature numerous models. To help you decide, here is a quick look at the manifest’s benefits.

You’ll Always Have an Abundance of Supply

A primary benefit of cutting UPC wide lots is that you’ll never run out of materials to sell. Because you will be dealing with vendors from different industries, you’ll never need to worry about not having anything to sell or changing your strategy to accommodate other products. This benefit will be most obvious when you sell a lot more than two or three products.

You Can Sell Merchandise That is Stacking Up

Another reason why it will be a good idea for you to start thinking about developing UPC wide products is that you’ll have the chance to sell the not so popular merchandise in the lot. If you have some products that are piling up on their own because no one is buying them, try combining them with other items and you’ll be able to get a profit even on those.

There are also some disadvantages you should know when it comes to UPC wide lots.

Price Analysis May Be Challenging

Unlike UPC deep lots that don’t need an extensive amount of price analysis, merchandise in UPC wide lots will need to be carefully analyzed for price and value. Because you’ll have a variety and brands of products available, you will need to take out time to separately evaluate them and decide on a price for each. What this means is that first, you may require an expert’s assistance to test the products and then decide on a price that is suitable not only for you but for your customer as well.

Consumers May Be Doubtful

Sometimes, the customers that you are trying to sell to may not be interested in all of the products that you are offering in the lot. For example, even though a lot of top brands such as Apple, Samsung, and HTC may be popular, customers won’t buy if you include items that are from another cheaper brand. However, this is not true in all cases because if you are able to provide a good price, customers will overlook the one to two items that aren’t according to their taste and buy the lot anyway.

Best Way to Cut Lots

Now that you have looked at both the types of UPC lots, you must be wondering about the best technique for you. However, this may be difficult because having both of these types of lots has its pros and cons.

Fortunately, one of the best ways to cut these lots is to incorporate both of them into your business. Instead of deciding between one of the two options, you can just offer both of the lots and make use of both of their benefits.

In fact, if you do some sufficient research, you will note that most of the popular resellers opt for this technique because it is beneficial in a variety of ways. If you go for the right kind of vendors and products, the profits will far outweigh the costs that you put in and you’ll begin to realize just how beneficial this business can be.

Here are a couple of tips that you can use when buying your liquidation products.

1. Find sources that are steady and predictable so that they can offer quality products at a lowered or good price.

2. Always buy directly from the retailer, manufacturer, or direct liquidation agent as this will help you save the cost that you usually pay a middleman.

3. Try to find product sources that are close to your business or location because this will help keep freight charges down.

4. Develop smaller lots because these are a lot more preferred by customers.

5. Be careful with suppliers offering merchandise at a very low price as this is a sure sign of poor product quality and functionality.

6. Look for suppliers who are honest, straightforward, and good at communicating so that you don’t have to start looking for other options just after a month or so.

The Wrap Up

Though it may take you some time to properly decide the kind of lots that you want to sell in your business, the results will be more than what you expected initially. The key to a great liquidation business is research, so make sure that you research as much as you possibly can and create a business that is appreciated.

You’ll find a lot of other great tips and tricks for every aspect of liquidation on this website, so don’t forget to expand your knowledge right here through Liquidation 102.

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