If you sell products online, you have the challenge of figuring out where to source those products. There are many different ways in which you can buy products. Furthermore, there are many places you can go to source your inventory.
Often, online sellers turn to flea markets, garage sales, and other places for their inventory. But finding worthy products at those venues is both difficult and time-consuming. Clearance liquidation could be a more convenient and lucrative way for you to find products to resell.
Whether you’re new to liquidation or an experienced professional, there are a few things you should know about buying your products from clearance. Before you start purchasing, you should learn the basics of buying liquidated clearance products.
What Makes Clearance Liquidation so Popular?
The secret to reselling is to buy products at a steep discount. For that reason, you should consider buying clearance items. You can find products selling for up to 95% less than the original retail price in liquidation.
This might tempt you to go to your closest department store and check out their clearance rack. However, this isn’t a great business model. You need to sift through tons of clearance products in order to find a great deal. After hours of searching, you might only have a small box of inventory. It’s also likely that the discount won’t be significant. While clearance prices are lower than regular prices, they might not be much lower.
The real solution is in clearance liquidation. Why spend your time picking through stores when you can buy a lot of clearance products? You can get enough inventory to stock your store, and all it requires is browsing the internet. If you have a reputable source, it takes almost no time to find good clearance stock.
Making a Niche for Yourself
There’s another reason you should consider buying liquidated clearance items. Often, one lot includes multiple items of the same product. If you only have a few types of products, you can target the customers who want those items.
Consider this example. If you have an online store that sells thousands of very different products, you have a broad target audience. You will struggle to find a marketing technique that works. This is due to the fact that you have no one customer avatar.
However, you could have an online store that has a large inventory of only a few products. When you’re creating a marketing campaign, you have a clear goal. Your customer avatar is apparent, and this makes it easy to target the right prospects.
Having a niche could be your key to a successful business. In addition to making it easier for you to target your customers, a niche business also gives you the ability to become an expert in your field. Customers may start to view you as an industry leader.
This gives you more power as a reseller. For example, you can have an authoritative blog. That blog could be what drives more traffic to your website. Typically, the people directed to your website will be individuals who become paying customers. Having authority also means that customers will trust you more. When they need something, they will turn to you and your products.
Why are Clearance Products so Affordable?
If you’ve looked at some of the prices for clearance lots, you might be shocked. The prices tend to be very low, and there’s a reason for this.
When products don’t sell in the store, big businesses want to get rid of them. They don’t want to waste their money keeping items that don’t sell on their shelves. And they don’t want to tie up their assets by throwing the products in storage. Therefore, they try to make money off of their stock.
Retailers sell their clearance liquidation to make money immediately. Although the selling price is so low that they take a loss, big businesses can afford it. This gives resellers an opportunity to make money.
What Do People Do with their Clearance Products?
If you decide to give clearance liquidation a try, you have several options for reselling your inventory. Some resellers have physical locations. In these stores, customers can buy products for slightly less than they would at traditional retail stores. The customer wins, and the store owner profits.
However, there are drawbacks to owning a physical store. First and foremost, there’s the high monthly rent. Depending on where you live, you might need to turn over most of your profits in a rent check. To avoid this, other resellers opt to sell their products at flea markets, garage sales, and other similar venues. Often, the cost of a booth or table is low. You can pay a small, flat fee and have customers come through and browse your selection.
Then, there are resellers who only sell online. These business owners don’t need to worry about paying for a physical location. However, they do need to worry about other fees. Websites like eBay and Amazon aren’t free for sellers. The costs vary, but they typically favor sellers who have large inventories. Because online shopping has become so popular, there are new developments that make reselling online easier than ever.
Tips for Being a Better Buyer and Seller
Although buying liquidated clearance merchandise could be very profitable for you, it could also be very difficult. To make a profit, you need to put in the effort. Following these tips can improve your chances at success:
1. Get your Resale Certificate
If you want to buy inventory from liquidation companies, you may need a resale certificate. While all companies don’t require this, many do.
You need to register for your certificate in your state. The process is fairly simple but differs from state-to-state. Usually, the process is worth your time. It lets other businesses know that you are serious about what you do. Furthermore, it prevents you from trouble with the IRS.
2. Only Buy from Reputable Businesses
If you do a quick online search, you’ll come across hundreds of companies who are selling clearance products. However, not all companies are created equal. Some companies pick through their products and only sell the bottom of the barrel. Other companies charge high prices or misrepresent their products.
As a reseller, it’s important for you to know what you’re getting. This means working with a reputable company. Before you buy any inventory, do your research. Look for a company that has sold millions of dollars in products and has been around for over a decade.
3. Understand the Costs
Every business owner should understand the costs of their business. This applies to selling fees as well as any inventory purchases. When you’re looking for a clearance lot, pay attention to the fine print. You should know the cost of shipping as well as any added fees you might encounter.
This is especially true for platforms that sell their products through auctions. Some companies charge a buyer’s premium. Typically, this is between three and five percent of the lot’s value. Although you might only bid $500, the premium will raise the cost. Shipping can also cause the price to increase. If you’re involved in an auction, do the math before you make a bid.
It’s important to realize that you won’t immediately sell all of the products you buy. In fact, it could take you months to process the inventory, list it, and sell it. If a purchase will tie up all of your business assets, you should rethink the purchase. You might want to opt for a smaller lot that leaves more of your assets in your bank account.
4. Consider the Quality
If you don’t have good products, you won’t make good sales. It’s that simple. Unfortunately, some resellers don’t do their research and end up with products that won’t sell.
As you’re searching for inventory, consider the type of products you’re buying. Is there visible damage to the box, or is it brand new and never opened? Is it a lot of scratched and dented products? Fortunately, clearance products tend to be of high quality.
You should still be cautious. Be sure to read the full description before you decide to buy products. If you come across any terminology you don’t understand, take the time to research it. Most importantly, don’t be afraid to ask questions. If you work with a reputable company, they should be willing to answer all of your questions.
If you’re selling certain products, the quality can be affected by the expiration date. Sometimes, clearance products have been around for a while. They could sit in storage for years until someone finally decides to sell them. Therefore, they could be expired.
To avoid purchasing expired products, check the dates. Food products aren’t the only products that can expire. Printer ink, make-up, and diapers also can go bad. If possible, find out if the clearance stock is already expired. Even if it’s not yet past its shelf-life, it could be close. Some of the inventory could be on your shelf for months. Make sure it won’t go bad before you sell it. Otherwise, you’ll either have inventory in the garbage or customers complaining about expired products.
5. Have a Plan
If you’re excited to get started in liquidated clearance sales, you should be careful not to get ahead of yourself. You need a plan. For instance, you need to know your specialty. What products will you sell? How might you source your products?
Additionally, you should have a plan for the logistics. If you’re buying large lots of inventory, where will you store them? You might need to rent a storage facility or rent a truck for transportation.
One way to plan your business is to take things slowly. Instead of rushing into the business, take your time. Consider your budget and don’t put all of your money into your first lot. Rather, make your first lot a small investment. This makes your purchase a calculated risk and not a major gamble. If you have a hard time selling your products, you’ll have the rest of your start-up capital to rely on.
What Should You Know About Trends in Clearance Liquidation?
Over the years, the liquidation industry has changed. The world of liquidated clearance is no different. As more retailers are turning to liquidation, the prices are dropping. Resellers have plenty of resources for affordable inventory.
However, there’s another reason liquidation has changed. With the blossoming of e-commerce, resellers have multiple ways to sell their products. If you have a business, you can use the internet to sell your products to people around the world. And there’s more than one way to sell your products online. You can auction your products to others, create a brand and sell through your own website, or use a marketplace to get your products out to the public. Furthermore, you’re not limited to just one avenue. Some resellers even use multiple platforms to sell their products.
Although there’s a lot you should know about liquidation, one of the most important things you should realize is that it doesn’t happen overnight. If you want a successful business, you need to put in the work. This means taking the time to create a strong business model, finding the right inventory, and reaching your target audience.
Working with Merchandize Liquidators
Many business owners struggle to find good inventory. However, you don’t need to waste your time or money looking for inventory. Merchandize Liquidators has been around for over a decade. We know how important it is for you to have solid inventory. Therefore, we strive to give our customers great merchandise at an affordable cost.
There’s no way to guarantee your business will be successful. But there are ways of improving your chances at success. It all starts with finding the right inventory. To get started, browse through our selection of clearance lots. You can find a variety of products in different lot sizes. If you have any questions, contact our team for help.
Title: Clearance Liquidation | Merchandize Liquidators
Meta: Learn about the basics of clearance liquidation. Find out how Merchandize Liquidators can help you.