liquidation - How to Make Product Liquidation Work for You - Sourcing Liquidated Products
by Chris Malta
Who's Liquidating and Why?
There are many reasons companies choose to liquidate — order cancellations, bankruptcies. Maybe their business is expanding and needs cash. Oftentimes, companies that are relocating will liquidate supplies, equipment, even inventory. It's actually financially more advisable for them to just walk away, than to put the time, effort, and money into moving them. It's a good idea to know why the items you're looking at are being liquidated — there may be a perfectly valid reason, but you don't want to get stuck with goods that you can't move either.
Sourcing Liquidated Products
So what exactly are you looking for? You want to find off-price, overstock, out of season, promotional items - liquidated products. How do you find suppliers with surplus goods, and manufacturers with overstocks and canceled products? You can look at courts dealing with bankruptcy and insurance companies dealing with excess and damaged merchandise. Sometimes U.S. Customs will have unclaimed goods, or the police will have stolen property you can purchase at deep discounts.
Web sites like Liquidation.com and LiquidXS.com also locate manufacturers and suppliers with closeout goods, which they resell online for wholesale prices.
What Should I Know When I Buy?
When you buy liquidated goods, it’s critical that you know whether or not your supplier is legitimate. Nelson suggests, “Ask for references of people who’ve already done business with them.” He also recommends checking out the reputation and type of operation — how long they’ve been in business, what they carry, if they have volume discounts.
Above all else, know their policies. What are their protocols regarding returns, cancellations, guarantees? What about exchanges? Credits? Do they stand behind their products? The most important thing is to be comfortable with the company and to feel that you can work with them.
4 Tips for Shopping Liquidated Items
1. Know your customer base. You have to give your buyers what they want, not what you want personally.
2. Stay in the niche you've carved out for yourself. If your E-Biz sells athletic apparel, don't try offering blenders on your site just because you found them at closeout prices.
3. Don't try to compete on price alone. While liquidated items can give you a pricing edge, you just can't beat out the big retail stores. So you need to have other features to draw your customers in: easy returns, good customer service, a well laid out web site.
4. Have a flexible business plan when working with liquidated items. If you stock certain quantities of specific products - types, colors, styles - for your E-Biz, you can't plan to consistently fill those with liquidated products. The items change too frequently.
Make liquidations only one source for acquiring your inventory - it's a great way to spice up your product line and get some amazing deals for your online store.