You may have thought about buying liquidation merchandise, such as shelf pulls, overstocks, and customer returns from wholesale liquidation companies, but did you know you can go direct to the source to buy this merchandise? You essentially will be “skipping” the middleman when you go direct, which translates into a lower price per unit purchased. A lower price per unit means large profits for you, the reseller.
How do you go direct, and more specifically, how do find the direct source contact information? Finding the direct source maybe easy, for example, if you are buying catalog overstocks from a wholesale liquidator you simply contact the catalog company directly to inquire about excess merchandise opportunities. You must be persistent when contacting a company direct because it takes time getting in contact with the specific person in charge of excess , and customer returned inventory.
Some catalog companies and large retailers will not sell excess inventory to individual resellers. Some companies will contract with large wholesale liquidators to move excess inventory, so in that case a wholesale liquidator is the “direct” source. Does that make sense?
Let me give you an example of a famous retailer and how they choose to move returns and overstock: Costco wholesale has a continuous flow of customer returned merchandise at each store, just like every other large retailer. Costco’s internal strategy to move returned merchandise is unique unto other chains stores; they allow stores to setup individual contracts with local liquidation buyers.
This could be good news if you are looking for Costco customer returns, but on the flip side…contracts are very specific in nature. If you are awarded a contract to buy your local Costco’s returns you must take all available, whenever available. If they have 7 pallets this week and 10 pallets next week…you take all of them. If you cannot meet Costco terms, or you breach the agreement, guess what? You lose your contract to buy. Honestly, you need a big warehouse and a really strong retail market to process the amount of returns Costco can throw at you.
To wrap this up, you can skip the middleman and buy liquidation merchandise direct, but sometimes the quantities and cost make buying direct unreasonable for the size of your business. Think about it before you tread into deep waters!
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