Over the years I have resold customer returns on a retail level, such as on eBay and through a storefront, and I’ve also brokered loads direct from department stores to other eBay auction sellers. I’ve made a tremendous amount of money helping others buy pallets of general merchandise, clothing, electronics, and other various types of wholesale merchandise.
Let me explain how a brokered liquidation transaction works:
The broker is basically the facilitator of a purchase. He finds merchandise to advertise then helps the buyer buy arranging freight upon purchase. The Broker makes money by charging his buyer a markup on the load. How much money? Well, that depends on the Broker. When I brokered pallets and truckloads of merchandise, I added a fair markup, but I always tried my best to make sure my buyer wasn’t paying too much after freight costs. I figured if my buyer was trying to resell the items, those items must be sourced at a cost that would allow my buyer to make a profit. If my buyer can make a profit, he would return to buy from me again, right?
In my experience as a Broker, most of those who purchased from me were new to the liquidation industry. I spent a great deal of time trying to educate each buyer before he or she plopped down thousands of dollars for a multiple pallet purchase. Again, I thought my experience would also bring value to my buyer.
There were several times were a buyer would call and ask for a particular type of load, say dollar store merchandise for example. The buyer would go on to say that they wanted to try and resell this type of merchandise on eBay. I would discourage a purchase such as this for eBay citing the fact that dollar store-type items would not sell on eBay, and essentially, money would be wasted with the purchase. I would then try to help locate pallets an truckloads of items that would represent a good seller for the buyers particular resell method. This kind of customer service is really unheard of within the liquidation industry, at least from a brokered transaction.
If you are taking a leap of faith buying from a Broker, make sure you know what you are buying and if the load can be profitable for you once shipped. Take your time and never be in a hurry when making a purchase. Never let your excitement or expectations steer you in the wrong direction.
This is one of our many Liquidation Boot Camp posts where we talk about the basics of liquidation product sourcing. If you’re new to the idea of purchasing liquidations, please review more Liquidation Boot Camp Posts here.
Our 2020 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