No matter where you will be reselling liquidation goods, i.e. Amazon, eBay, flea markets, or a traditional storefront, there are a few considerations one must understand and properly prepare for. Here are a few important issues in no particular order:
Logistics – The thought of having large pallets or even truckloads of merchandise delivered to your door can be a little scary at first. There are a lot of questions one might have when scheduling multiple pallets shipped by freight carrier.
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Aside from freight costs, the biggest consideration when having pallets delivered is removing pallets from the truck. Without a forklift, a liquidation buyer must have pallet loads delivered with a trailer that is equipped with a lift gate. A lift gate allows the truck driver to lower pallets from the trailer to the ground. If you do not have a forklift make sure to request delivery with lift gate service.
Storage for inventory – A full 53′ trailer will hold 24 single stacked pallets. Standard pallets are 40″ x 48″ and stacked as high as 6-7′, depending on the type of merchandise ordered. If we do the math, a pallet takes up almost 13.5 square feet of space. A full truckload of 24 pallets equals 324 square feet!
To give you some idea as to volume, the average 2 car garage is approximately 425-475 square feet in size. You may be able to fit 24 pallets in a garage, but this would leave no room to sort and process merchandise; this is also assuming the garage was completely empty before adding the pallets.
Unsellable – While overstocks and shelf pull items (MOS – Marked Out of Stock) may not be damaged, customer return pallets will contain items that are damaged. You must have a plan in place for damaged items. Some items can be fixed, while others may need to be resold as is, or thrown away altogether. Items that cannot be sold due to condition affect overall profitability.
Missing pieces/parts – Customer returned loads, depending on the type of merchandise, will inevitably contain items that are missing parts and pieces. Some short items can be resold as is, while other items must sit in storage until you can order replacement parts from the manufacturer.
Brand & store resell guidelines – Some department stores impose resell restrictions when buying customer returns and shelf pulled items. Some restrictions to look out for are:
- Cannot resell liquidated goods with a specified mile radius of store originated from. Example – Sears customer returns cannot be sold through a physical location within 50 miles of a Sears department or outlet store.
- Store branded items must be defaced before resold. Example Macy’s Store brand Charter Club merchandise (clothing) must be defaced with a line drawn through the label
Some stores require liquidation goods to be exported out of the country
- Most, if not all, department stores forbid liquidation buyers from advertising where goods originated from. For example, if you bought pallets of clothing from Macy’s you cannot use Macy’s in any form of advertising when reselling goods.
As you can see from the considerations above, it’s not a matter of ordering pallets of merchandise, and figuring out the details later. There is much preparation involved in working with liquidated goods. All of the topics and considerations listed above are discussed in great detail within the pages of The Liquidators Guide. If you want to learn about the industry from a liquidation expert, do yourself a favor, order the guide today.