Top Tips For Buying Liquidation Pallets

One of the things that are vitally important to get right when running a retail business is finding the right wholesale supplier. There are lots to choose from, from general wholesale suppliers to specialist wholesalers, from dropshippers to discount wholesale suppliers. But what’s the best supplier, and what’s the best type of stock to buy to ensure you have a steady supply of cheap, top-quality merchandise to sell to your customers while maintaining a healthy profit margin?

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The answer is to buy liquidation pallets from a top-tier online liquidation specialist like Direct Liquidation. Here are some top tips for finding the right supplier, finding the best quality merchandise and buying liquidation pallets that will make sure your business continues to make money in today’s fast-paced and ferociously competitive online and offline retail environment.

Choosing The Right Supplier

There are many different types of wholesale suppliers catering to the needs of different types of retail businesses. As a general rule, it used to be the case that smaller-scale retailers would use the services of a local general wholesale supplier who could be relied upon to supply retailers with the wholesale merchandise they needed at a fair price.

Sadly, those days are long gone. Nowadays, it’s far more likely that the goods on offer from general wholesalers will be sold at a price that’s so close to retail that it isn’t worth your time buying from them. There is also a lot of cherry-picking going on. This is the practice where a wholesaler buys a pallet of wholesale goods, creams off the best stuff to sell separately on eBay or Amazon for a higher price, and then sell off the rest to unsuspecting businesses who think they’re buying quality goods when they most certainly are not.

Often, this is aided by manifest manipulation, where manifests are changed to make pallets of junk sound attractive. Many a retail business has fallen into this trap, and it’s a growing problem.

Instead, when choosing the right supplier, you should be looking at what a liquidator such as Direct Liquidation can do for your business. Liquidators work in partnership with big national retailers, providing them space on their online liquidation auctions websites through which retailers such as Target, Best Buy, and Walmart can sell their unwanted surplus stock direct to retailers for considerably less than the prices local general wholesalers can hope to offer.

Finding The Right Liquidated Stock For Your Business

So, what is surplus stock? The wholesale merchandise the national retailers have to offer businesses via liquidators falls into three categorizations:

Customer Returns

By far the largest amount of surplus stock retailers wish to dispose of is unwanted customer returns. Customers return goods for many reasons, among them:

• The product is faulty.
• The product or its packaging is superficially damaged.
• The product or its packaging is visibly damaged.
• The product does not live up to the customer’s expectations.
• The product does not fit.
• The product is incorrect.
• The customer has changed their mind about their purchase.

Whatever the reason behind products being returned, they can no longer be classed as ‘A-stock’ – i.e. brand new. Instead, they are classed as second hand, regardless of whether they are or not. As big-name retailers such as Walmart are not discounters, they look to dispose of this type of wholesale merchandise as fast as possible to stop it clogging up their storage and supply chains.

So, what does this mean for retailers? It means that customer returns are a great source of cheap, good-quality brand name and own-brand products that can be bought in a variety of conditions ranging from ‘as new’ to ‘tested-not-working’ (great for electronics retailers looking for spares to bring broken stock back up to factory spec) and then sold at an attractive array of price points to suit a wide range of customers on many different budgets.

Overstock

Overstock is the term applied to products that have been over-ordered, or to seasonal stock. Retail, even for the biggest names in the business, is not an exact science, and it is therefore inevitable that stock is over-ordered as a matter of course, in particular, electronics items that seem to be superseded by newer models every five minutes these days.

Over-ordered products must make way for newer models and newer products, and are therefore a great source of what are usually brand new – if slightly older – merchandise that can be sold at attractive prices to customers looking, for example when it comes to tech, for great-quality consumer electronics that won’t break the bank.

When it comes to seasonal goods, this is usually a new product that is surplus to requirements once the season has passed. For retailers – especially those who sell locally via sites like Craigslist or at local flea markets – seasonal goods are usually new products, can be bought for very little and then can be sold for an attractive price once that season comes around again. For those looking for seasonal merchandise, check an online liquidation marketplace for seasonal overstock pallets just after each season has ended – for example, look out for Christmas merchandise in January, Halloween merchandise in November, etc.

Closeouts

Closeouts are the term applied to stock that’s usually coming from a store in a retailers’ chain that they have decided to close or restructure. With no room in their warehouses for the stock the store used to house, it becomes surplus-to-requirements and retailers look to dispose of it quickly. From a retailer’s perspective, closeouts present great value for money as they are usually brand-new items that can be sold for a higher price. The term closeouts can also be applied to ex-display and open box models – effectively brand-new merchandise that the retailers cannot sell as such.

Buying Liquidation Pallets

If you wish to buy liquidated pallets from an online liquidation marketplace, you will first need to get hold of a valid reseller’s license. This license allows you to buy and resell wholesale merchandise in your state without having to pay local sales taxes. Instead, your customers pay the tax when they purchase from you. Reseller’s licenses can be acquired from your state’s tax department or department of revenue.

Once you’ve got your reseller’s license, you can sign up for an account with a liquidator. This will allow you to bid for pallets of liquidation wholesale goods in online liquidation auctions, as well as paying a fixed price or negotiating directly with the liquidators if that is what you would prefer.

In the case of Direct Liquidation, finding the right pallet of wholesale merchandise for your business is easy. Direct Liquidation has partner agreements in place with Amazon, Lowe’s Hardware, Target, and Walmart, each of which has its dedicated vendor pages on site. As well as this, you can also browse for the pallet of liquidated stock you need via Direct Liquidation’s drop-down category menu. Direct Liquidation offers a huge range of brand name and own-brand wholesale merchandise for sale in the following comprehensive list of categories:

Automotive, Baby, Books, Clothing, Shoes & Accessories, Electronics, Fixed Assets, Food, Furniture, General Merchandise, Health & Beauty, Home, Home Improvement, Industrial Supplies, Jewelry, Office, Office, Party & Occasions, Patio & Garden, Pet Toys & Pet Supplies, Sports, Fitness & Outdoors, Toys, Unsorted.

Within those categories, you’ll find a massive range of goods sold by the pallet from manufacturers such as LEGO, Beats by Dre, Stanley, Hitachi, Samsung, Mainstays, Apple, Fisher Price, Adidas, Sony, Black & Decker, Blackweb and many, many more.

Once you’ve found a pallet of liquidated goods that you like the look of, the usual course of action is to bid for it in a live liquidation auction. You can make sure you never miss a pallet auction by setting a live email alert on each pallet you’re interested in. This will send you a notification prior to the start of each auction you’re interested in.

Once an auction starts, you can enter as few or as many bids as you like. Remember to calculate the total worth of the goods in the pallet alongside what you can reasonably expect to make from them after taking into account such factors as shipping, storage, online store fees, etc. This should give you a good idea of the maximum you should pay for the pallet.

Once you’ve set that maximum, stick to it. Don’t be tempted to go ‘bidding crazy’ and exceed your maximum bid. It’s better to lose a pallet you won’t make money on than buy one and regret it. With surplus stock arriving daily in liquidators’ distribution centers, you won’t have long to wait until another one comes along that catches your eye.

If you do successfully win an auction on a pallet of liquidated goods, all that’s left to do is pay for your goods and arrange to ship. A note on that – if you’re close to one of Direct Liquidation’s distribution centers located in Blacksburg, South Carolina, Frankfort, Kentucky, Bentonville, Arkansas, Rogers, Arkansas, Milton, Ontario (Canada), Greenfield, Indiana and Las Vegas, Nevada, then you’re welcome to come along and pick up your goods in person. This will drastically cut down on your shipping costs.

If you’re not close to these locations, you should check out how much Direct Liquidation charges to handle shipping. Oftentimes, Direct Liquidation’s shipping options are cheaper than third party couriers, so be sure to check before going elsewhere.

Shipping arranged it’s then simply a matter of waiting for your goods to arrive and then selling them to customers who will be delighted at the range and prices you will be able to offer. If you’re looking for a better source of cheap, top-quality wholesale merchandise, you need to switch to buying pallets of liquidated stock from wholesale liquidation merchandise. It’s the smart choice for resellers looking to offer their customers great quality products while still maintaining a healthy profit margin.

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.