We’re all looking for a deal, and every business is looking to save money wherever it can. Bidding for wholesale or surplus inventory on liquidation websites can be one of the best ways to get a great deal for your store. But despite the discounts, they can be intimidating. Here are five tips to make sure you score the best deals available.
Know what you want
One of the easiest ways to be overwhelmed is to start browsing without any idea of what you’re looking for. Buying a lot of stuff you don’t actually need or which fails to entice your target demographic means you’re losing money, not saving it.
You can narrow your search by brand if you know exactly what you want, or by department if your needs are more general. You can also search by store. You can find returned or discontinued Walmart liquidation items or from Target, Amazon, or other big names in retail.
Know your market
If you’re just starting out, this means doing a good market demographic analysis. Once you know who you’re targeting, and with what, you’ll be poised to hone in on just the deals you need.
Will your target market demand brand new products, or will they prefer getting a discount on refurbished items, or items in less than perfect physical condition? What volume can you realistically expect to move in a month, and how does this affect your bidding or the size of pallets you look for?
Know what you can’t get
Do you already know that the finest Hunter Douglas window treatments will always sell well with your customer base? Window treatments are unique to the preferences of buyers, the decor of individual homes, and the size of windows they have to cover. But items of this nature may not be a good choice at a wholesale auction.
Liquidation items can come in limited quantities, color choices, or sizes. Use liquidation inventory to stock up on items people are likely to be less picky about. It’s also unlikely that you’ll be able to get the newest, most up-to-date versions of products, especially when it comes to electronics. What you can expect to find will be quality items that have just recently become obsolete, overstocked merchandise, and seasonal overstock.
It’s important to carefully read all the information about a pallet before you make a bid. Read the manifest, look at all the available pictures, and carefully check the description. Wholesale liquidation items are often sold “as-is” and will be difficult or impossible to return. Learn what the terminology means. In most cases, “brand new” or “like new” means that the items themselves have no defects or any cosmetic damage, though most “like new” items will have some damage to packaging.
You may also run across grades of refurbished items. Grade A items have been restored to manufacturer quality and look perfect. Grade B items have been restored perfect operational quality but may have small cosmetic wear. Grade C items operate perfectly but show significant cosmetic issues.
Remember there are going to be more expenses than just the payment for the items themselves. There may be taxes to pay, depending on where your business operates or where you need items shipped to, and it’s important that you factor these into your budget. You’ll also need to arrange and pay for shipping. If you need the items quickly, shipping costs can skyrocket quickly, so it’s a good idea to get a ballpark figure before you ever put in a bid.
It should go without saying that you should never make a bid that, combined with taxes and shipping, prevents you from selling items at a reasonable profit. People regularly fail to take all this into account when bidding for wholesale inventory, and inventory management problems are the downfall of many small businesses.
Wholesale liquidation auctions are a great way to stock your business and save money while doing it. Just be careful to plan and execute your purchases wisely.