I received a very lengthy and inspiring email from J. Torres last week; he asked a couple of questions while revealing his experience buying and reselling liquidated goods. I’m providing a portion of his email today, so I can address his two questions.
My first liquidation lot purchase was 25 digital cameras from liquidation.com. This small lot of customer returned cameras cost about $400.00, which broke down to $16 per camera. I knew, even if the cameras were defective, I could at least resell them for $16 per piece to break even. When buying liquidations through auctions, I’ve learned that before entering my maximum bid, I always assume every piece is in the worst possible condition, and how much I can get for it in that condition, should I end up being the highest bidder.
In that first lot, most of the cameras where working and I was able to resell at a profit on eBay. The ones that did not work I resold for others to repair. I ended up making about a $300.00 with the lot in about two weeks and I’ve never looked back.
Today, I continue to buy and resell consumer electronics on eBay and Amazon but now I sell mostly cell phones. I work by myself from a small home office less than full time. My wife has since been able to quit her job to take care of our two boys. I have been doing this for four years and have had growth every year. Now, I am doing about $200,000 in annual sales with an average profit margin of 15-25%. This is working for us, but I think I should be doing better.
As I continue on this journey my biggest problem has been finding consistent suppliers. I buy mostly returns or refurbished electronics from liquidation.com and Techliquidators. I’m looking for a supplier with good prices that I can go to regularly and not have to wait for random auctions. I can do packages and pallets but not truckloads because I do business from home, and I simply do not have room to store truckload quantities. Do you have any suggestions?
Do you have any advice on financing for these types of online businesses? Sometimes for me it seems impossible even with an near perfect credit score and 3+ years of sales over $100,000. The only way I have been able to do it is with a few credit cards and a line of credit with cabbage, which has very high fees.
My Response -Wow, it sounds lke you’re doing really well with the business- good job! Sourcing customer return merchandise is difficult because you have to continuously track down good deals, and buy from several sources continuously. I feel your pain, but it’s par for the course, so to speak. I watch about 30-40 wholesale liquidators almost daily because good deals come and go quickly.
Have you tried Genco Marketplace? They just announced the arrival of hhgregg customer returns in small and large quantities. Might be worth a look. I would also keep my eye on Discount Whoelsalers, Via Trading, and surplus deals found at TheImasd.com. I’ve also found deals through Inmar marketplace – Google these sources and bookmark each site and/or register for their mailing lists because new loads are available daily.
As far as financing…how about bringing in a family member with capital? More buying power gives the opportunity to buy in larger quantities, which can help increase profit margins. Cha –Ching in my book.
Your email will be an inspiration to many who come here to learn about the liquidation industry. I thank you for your time and would ask that you keep us posted about yoursuccess. Our readers would love to learn from someone who is currently turning $200,000 in sales with liquidation goods. Way to go!
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