I remember way back when I discovered the idea of purchasing liquidation merchandise. I searched online for hours that turned into days with full excitement of the prospect of buying shelf pulls or customer returns. I spent so much time searching and reading because I wanted to fully understand what it was I was about to buy. It was intimidating, but exciting at the same time. Initially I let me excitement get in the way of logic and because of this, I made a few costly mistakes.
Let’s review some important information about buying pallets and truckloads. When I write posts on this blog, I tend to forget I’m talking to a lot of new buyers. I forget the fact that terms I throw around and use may not be recognized by someone who is just getting started.
Are you new to the liquidation world? Are you what some would call green? I’ll assume that you know absolutely nothing about the liquidation industry-at all.
Here’s the deal…..you can gain access to name brand merchandise without paying an inflated wholesale cost. There are caveats to this though, and you should understand that merchandise you purchase could be compromised in some way. Here are some merchandise category descriptions to help you understand what it is you might be thinking of buying:
Liquidation Merchandise – This phrase pertains to any stock that is being sold just over or below cost. You might pay a percentage of original retail or wholesale to acquire this merchandise. It really just depends on who you are buying from at the time. For example, Macy’s liquidates both shelf pulls (RTR Ready to Wear) and customer returns at a percentage of vendor cost (Vendor cost = original wholesale price). Liquidation merchandise can be comprised of the following descriptions of items: customer returns, shelf pulls, and overstock items. Ask what about and understand the type of merchandise you decide to buy. Take your time!
Customer Returns – No particular guarantee as to item damages; items may be gently handled or broken. Always expect a percentage of damaged and unsellable items when you buy in this category.
Shelf Pulls – typically this type of liquidation merchandise is new, just having been pulled off the retailers rack or shelf. Shelf pulls are unsold goods that a retailer is now liquidating to gain capital. Shelf pulls generally are the best type of liquidations to buy as damages ratios are low.
So, as stated, do your research before making your first pallet purchase. Don’t get excited and always use logic when making that first step. Questions? Please use the comment section below to ask for clarification about this “mini” liquidation tutorial.
Our 2017 Liquidators Guide chronicles 12 years of wholesale product sourcing experience and includes my personal black book of direct source contacts! As an industry expert, I'll share the success I've enjoyed along with the mistakes I've made buying and reselling liquidation merchandise.
If you are thinking about buying pallets of liquidation merchandise from a liquidator, broker, or direct from department stores, you need to check out The Liquidators Guide