I’m a new buyer of liquidation merchandise and I am confused about the reselling agreement I signed when I bought a couple of pallets of general merchandise. In the agreement it stated that the “salvagor” cannot sell this product within a 50 mile radius of the originating store? I live four blocks from Sears! What do I do now? I know I signed the agreement, but there has to be a way to work through this. There must be hundreds, if not thousands, of buyer selling customer returns within a 50 mile radius of Sears or any other store for that matter. Please help explain this to me…I’m frustrated to say the least.
Hi, thanks for emailing your question. First, take a deep breath. Retailers explicitly dictate how liquidation, or salvage merchandise, can be resold. You, like everyone else, must sign brand and reselling agreements before buying pallets and truckloads. Are they enforceable? Yes, they are!
The question comes up over and over, how can one resell liquidation merchandise without breaking the terms of such strict resell agreements? The answer is not cut and dry, and it really depends on how you intend on reselling merchandise. If you’ve purchased pallets of Sears merchandise, I wouldn’t open up a discount store down the street from a Sears retail store. I wouldn’t be too concerned about selling the merchandise on eBay.
The best way to protect yourself is to simply follow these steps: (1) remove all store references from each item you have purchased, this includes and store brand names (for example, Craftsman is a Sears exclusive brand; the name Craftsman must be removed from your item before you resell it; and (2) remove all product literature including warranties, manuals, and registration cards from each product.
It is also prudent to eliminate any reference to the original store name. If someone asks you where this product comes from, provide a generic answer such as, “this item is from a moderately priced department store, and by terms of purchase agreement, we cannot identify the store of origin.”
You can virtually eliminate the need to remove brands, labels, tags, etc. from your merchandise if you purchase loads from Sears called “national brands,” which are 99% exclusively non-store branded items.
So, what’s the big deal? All of the stores that sell pallets and truckloads of liquidation merchandise do not want one of your customers attempting to take merchandise back to the original store for return credit. As a good habit, I also “line out” all UPC codes when I resell an item sourced from the secondary market. A black sharpie works well when lining out (single line through UPC code) items.
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