Question: I just purchased my first pallet of shelf pull clothing, but I am concerned that the company I bought it from took advantage of me! Almost all of the clothing has original price tags, but each tag says 0.01! Does this mean the wholesaler bought the clothing for a penny each, and then sold them to me for a huge markup of $3.99? Help!

Answer: Hello…..thanks for the email. I am assuming you purchased a quantity of shelf pull apparel from the Federated chain of department stores, possibly Macys. First of all, I want to put your mind at ease about pricing. $4 for shelf pull apparel from Macys is a really good deal, and it sounds as though the wholesaler you decided to buy from charge an appropriate dollar figure per unit, or piece.

Take a further look at the clothing, especially the original retail tags. More than likely you will notice each tag has been marked down with a red pen. For example a shirt may have had an original price of $49.99, but was then marked down to $39, $29, and then eventually to $19. Correct? This tells you that the particular item experienced a several markdowns at a store level before it had aged, and was them marked for liquidation.

All retail store have what they call an aging process where they assign a “sales floor life,” if you will, meaning the time an one particular item will remain on the sales floor before being removed. If in that time and item does not sell…the store will continuously mark that item down in attempt to sell it. If any one item hits its aging ceiling, it is then pulled from the sales floor and marked for the salvage pile.

Macys, in particular, will apply a .01 price sticker to each item as a way of inventorying merchandise that is slated for liquidation. It does not mean someone, or company, paid one penny for that item!

So, to answer your question, NO….you were not taken advantage of when you made your first shelf pull apparel purchase. It sounds as though you got a great deal, and I am hoping you will be able to turn a profit with the method you are going to use to resell this merchandise….Good luck, and thanks for the question.

 

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