July 21, 2022 5 min read
With inflation rates soaring and countless people looking for new income opportunities, buying and reselling products appeals to individuals everywhere. However, most people are unfamiliar with reselling products sourced from liquidation warehouses. If you’re currently exploring ways to add income or replace a job with self-employment, now is the time to consider the benefits and opportunities associated with buying and reselling products obtained from liquidation warehouses.
What Types of Merchandise are Available from Liquidation Warehouses?
The short answer is that liquidation warehouses sell virtually any products consumers buy elsewhere. In many cases, available products are returned to online shoppers, and most are not damaged or defective, but some will be. Companies frequently choose to liquidate products rather than send them back up through the distribution channels. They lose too much money when doing so. That, in turn, means the companies need to find another strategy to dispose of the products and minimize their losses.
That’s where liquidation warehouses come into play. Companies find selling returns and other merchandise through these types of outlets rather than restocking them makes sense. The liquidation warehouses then offer the merchandise to individuals who specialize in selling the products to buyers looking for a bargain. Those resellers purchase products in bulk and sell them at a profit to bargain-conscious buyers. They generally market the goods online but may also have a brick-and-mortar outlet.
How Do Entrepreneurs Purchase Products from Liquidation Warehouses?
The liquidators frequently bundle merchandise into pallet lots and offer those pallets for sale. The sellers may or may not list the contents of the pallets so buyers know what they’re purchasing. Large companies like Walmart and Amazon are always offering pallets to buyers looking for bargain merchandise to sell. In many instances, buyers of liquidation merchandise buy anything from a single pallet to a truckload of product.
When checking out pallets of liquidation merchandise for sale, buyers review the contents before deciding whether the merchandise fits their needs and, of course, their budget. Liquidation warehouses sell inexpensive products, but they also sell larger, more expensive items. Buyers new to the industry often purchase single pallets to start, as they won’t be required to invest a large sum of cash right away.
While sellers around the country are enjoying significant profits from selling liquidation warehouse merchandise, starting on a smaller scale makes learning the ropes easier. Once buyers understand the ins and outs of reselling the products, generating additional profits is easier.
Understanding the Different Sources of Liquidation Products
While returns are a significant source of liquidation merchandise, shelf pulls are also common. Merchandise is pulled from store shelves when it isn’t moving. Some of that merchandise shows minor packaging damage from being moved around and handled, but the products themselves are usually in good condition.
Shelf pulls occur when stores misread their local market or simply order more than they can move quickly. Many items are pulled when stores restock for the next season, and they don’t have room to store unsold inventory. Those items are then returned to the distribution center and, rather than be restocked, are sold to liquidation warehouses for disposal. The costs involved with inspecting, repackaging, and storing the merchandise are too high. That means buyers at the liquidation warehouse have new inventory to select from and market to their buyers.
Buying Products from a Liquidation Warehouse
Liquidation warehouses obtain truckloads of merchandise from large corporations. They then sell individual pallets to “pallet flippers.” The pallet flippers then break down the pallets and sell individual items to buyers. Most people looking for ways to generate income couldn’t approach Amazon or Walmart and expect them to sell pallets of liquidation merchandise directly. But, buying from a liquidation warehouse is rather easy.
Liquidation warehouses are now common and provide a great option to acquire merchandise to resell. However, there are other options to consider. Online liquidation sites offer merchandise to resellers, but most of them are auction sites, which means you’ll have to bid for pallets rather than simply picking one that meets your needs from a liquidation warehouse. You’ll also have to pay shipping costs. In most cases, buying from a liquidation warehouse is more practical and provides the best chances of producing higher profits.
Generating the Highest Returns on Your Investment
While generating a profit from pallets is relatively easy, there are a few caveats to consider. First, buyers must choose their pallets carefully. As a rule, purchase a type of merchandise you’re familiar with. If you’re familiar with automotive products, opt for pallets that include that type of merchandise. On the other hand, if you’re familiar with outdoor gear, shop for a pallet that includes those types of products.
The next consideration is choosing products that sell well in your area. In other words, know your market. If you’re selling exclusively online, location isn’t really an issue, but if you’re selling from a brick-and-mortar location, avoid products that don’t sell well in your region. For example, swimming suits may not sell as well in Nevada as they would in Florida.
Avoid seasonal products unless you have the space to store merchandise until the appropriate season rolls around again. Understand that storing goods is an expense, so factor in those costs when considering a pallet of out-of-season products.
If you’re marketing products online, don’t forget about packing and shipping costs. Bulky or heavy products cost more to ship, which means the products need to be priced accordingly. Resellers are always in competition with other sellers who may be able to deliver the same products less expensively.
Consider the Downsides
Finding a pallet where all products are visible is hard, which means you can’t always determine what condition every item is in. Be prepared to accept a certain amount of unsellable merchandise in a pallet.
Discovering a few products that are not easy to sell is also quite common. That means you’ll need to be creative in marketing some goods. However, remember that you’ll generally have a good idea of what’s included in a pallet before making a purchase. If there is a list of contents available, look it over carefully to ensure the items are what you expect.
The first step is to evaluate your interest and commitment to flipping pallets. If you’re looking for a great way to generate income without a great deal of risk, consider purchasing merchandise from Pennies for Gold. If you’ve done your homework, selling individual products won’t be difficult, and your income will increase as you gain experience.
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