I’ve had a busy week, but took the time to read and respond below to a Heidi, who is going to open an online clothing store soon. Here is the email I received last week:
Hello Rob, Wow! Loved your book, extremely helpful. I am a seasoned business owner in a different industry and I’ve long had the desire to start an online resale store. Before locating your information I was left with fragmented and confusing information and the feeling I was about to be taken advantage of by a less than reputable liquidator. My husband and I are still in the planning stages and I have a few critical questions that will hopefully give our ship proper direction.
Our initial plan is a clothing store with a focus on work wear, (slacks, skirts, blouses, suits, ties, etc.) and outerwear while offering Petites, Plus size/Big & tall line. We may branch out later but I think keeping it simple for now is the best choice. Get in a groove and get some traction first.
My concerns are (1) Our initial capital is VERY limited, we’d like to have as much variety as possible but can’t afford 4 pallets of designer clothes. We will be working toward that by reserving profit to reinvest into product. I checked out Liquidation General which seems to have a good variety of product but the per unit price is $6 but with free shipping. This seems manageable and the profit margins smaller but it feels like a good starting point. Insights or suggestions? (2) How in the world do I figure shipping (to the customer))? For example if I’m breaking down the profit of a box of goods, do I factor in a certain dollar amount? Do you offer free shipping or pass that along to the customer?
I plan to contact Via Trading for a consultation as well, I loved that idea and we live about 6 hours away so I’d be able to visit them. I know you are a busy guy so I truly appreciate your time! Best regards, Heidi”
Heidi, thanks for emailing! As I always say, I love to hear from those who are excited and just getting a new business off the ground. I’m sure you realize that sourcing liquidation apparel means you will be purchased mixed assorted lots of mixed apparel. Shelf pull clothing all lots and pallets of shelf pull clothing is considered mixed, assorted styles, sizes and brands. Like Forest said. “Life is like a box of chocolates, you never know what you’re going to get” – This holds true to shelf pull apparel, it’s difficult to order specific brands, sizes, and styles.
We just got back from touring DLM Offprice, and I would certainly give Melea a call and tell her what type of clothing you’re looking for. DLM can customize your order meeting specific styles, brand, and size requests. Please tell her I sent you when you call.
I think Via Trading is a good resource for you as well; contact Steve Balmer and see if they can put together some lots for you as well. I’ve seen the quality of service Via adheres to, and I believe they could be a trusted source for shelf pull as well.
In terms of pricing, let’s look at it this way If Liquidation General and Via Trading are at $6 per unit and the clothing is mixed seasons, styles, and sizes, how much are you really paying per piece if 20% of the overall lot does not meet your store’s niche?
Do you see what I’m saying? If you cannot sell 20 pieces out of 100, the per piece cost of $6 now becomes $7.50! When you think about it you might be better off paying $8-$8.50 per unit knowing you’re getting exactly what you need to stock your new online shop. Are you still with me or has our boat started taking on water?
Since you are purchasing mixed assorted lots, I’m going to assume you will be opening a store on eBay? Is so, this is a great way to get started and build momentum.
By the way, I live in Chico, Ca. and I think you said that you live down in Santa Cruz. My wife and I travel quite a bit and love to stay in Aptos, which is just a few miles away from you. I grew up in San Jose, and Santa Cruz was a fun weekend getaway, what with the boardwalk and beach areas. Our favorite beach along the coast, close to you, is Sand Dollar Beach. Lots of memories made there!
Anyway, let’s get back to the prospect of opening an online store. Shipping to your customer is easy, if selling on eBay, check your competition and see what they are charging. This will give you a good idea of what to charge for shipping. Also, ship through the USPS using priority mail, flat rate mailers. This is a great way to ship clothing and you would be surprised at how many units you can get in a flat rate mailer or box. If setting up your own Ecommerce store, most “turnkey” solutions have shipping programs integrated with UPS, FedEx, and USPS based upon actual weight of order. Easy stuff!
With limited funds to get started, I would encourage you to start within a narrow niche. If the goal is to offer a diverse line, as you stated: work wear, (slacks, skirts, blouses, suits, ties, etc.) and outerwear while offering Petites, Plus size/Big & tall line, I would start first with either Plus Sizes, Big & Tall, or petites. So, I’m basically telling you to pick one category and build from there. Back to my advice above, either of these categories of clothing could be ordered from DLM Off-Price. Via Trading, Liquidation General, AML Inc., and other liquidators may not be able to offer category specific requests.
I would also suggest looking within the Off price market for specific styles and brands, here are a few wholesalers to explore:
Heidi, please keep in contact with us here at the Liquidators Guide. Your progress will be inspirational to all of our readers. Should you have further question, please contact us at any time.
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