How do I get started exporting to third world countries like Africa? I hear there is a great need for consumer merchandise. The whole idea seems daunting and I have no clue as to where to start.
I’ve taken the easy road when it comes to exporting; I work exclusively with contacts already in prospective countries who are trying to import consumer merchandise. Nine times out of ten, these importers already have buyers in place and they are just looking for merchandise to purchase. They are looking for large quantities of merchandise. I locate inventory for the importer and work with freight forwarders and customs brokers to move containers by sea freight to their country.
My involvement within the transaction is limited so my exposure to loss is also minimum. I find the deals and then offer to my growing contact list of large volume buyers worldwide. I do not deal with customs issues at all. This is the way I like to transact because, again, my exposure is limited.
What merchandise do I work with – I like to specialize in clothing and shoes. To you and I, a T-shirt or a pair of sneakers is something we do not put much thought into, but to those in Africa a pair of shoes is truly a luxury. Clothing items are also in high demand.
How I find liquidation deals – Well, I locate existing inventories and I get creative with clothing. Let me explain…I have set up key relationships with large churches, non-profits, and thrift stores to purchase used clothing by the pound.
- Churches – organize ongoing fund raisers with individual churches whereby members of the body bring in used clothing to the church office- ongoing. When a quantity builds up, the church calls and I pick it up paying by the pound
- Other Non-profits – I work in similar fashion setting up clothing drives for each non-profit. Clothing is donated to the non-profit, and I purchase based upon weight.
- Thrift stores – I purchase what they cannot handle
As far as closeout merchandise, deals come around every now and then where I purchase for pennies on the dollar. I continuously call manufacturers, distributors, and catalog companies asking to purchase excess, off-season, and surplus merchandise. When I do find inventories I offer very little. For example, two years ago I purchased the entire stock from a catalog retailer who went out of business. I paid twenty-five cents per item for dresses, tops, pants, and beachwear. The whole inventory was roughly 9300 items; with freight my cost came in at approximately $3400.00.
I brought the entire load back to our facility where we wholesaled the beachwear (600 pieces) to an existing client and then called one of our contacts overseas for the remainder of the clothing.
I advertised the clothing (8700 pieces) to my buyer in Africa at $1.50 per unit; he came back at $1.25 and wired $10,900.00 within 48 hours. We prepared the clothing and shipped it to the port of Los Angeles for export within four days. The beachwear was sold to a resort here in the States at $2 per unit ($1200 take all).
Here is how the transactions stacked up:
My cost $3400 for the inventory…
Sale #1 $10,900.00
Sale #2 $1,200.00
Gross Sales $12,100
Minus cost $3,400 = $8,700.00
Some large retailers, such as the Kohl’s department store, require exportation of goods if buying liquidation quantities. I worked on a deal selling three truckloads of Kohl’s (floor to ceiling hand-packed trailers) to a company based in Kansas, they planned to export all three loads to the Middle East. Working with a colleague our cost was $14K per truckload. We sold at $24,000 per truckload realizing a $30,000 profit split between me and my colleague. Not bad, huh?
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