There are many Liquidation businesses these days. For example, if you want to buy liquidation pallets in Victoria and other states of Australia. you can easily find multiple wholesale liquidation companies there. But what is a wholesale liquidation business?
What is a Wholesale Liquidation Business?
A wholesale Liquidation business is one where you sell liquidation merchandise in bulk to retailers. In general, a liquidation business is where you resell items. When it comes to a normal supply chain you have the manufacturer creating the product which goes to a supplier or distributor who sends the items to a wholesaler or directly to a retailer.
In the liquidation business, you don’t generally get the merchandise from the manufacturer. Rather, a liquidation business will buy it from the retailer who couldn’t move the stock and wants to get some money out of it.
So, why is it so popular nowadays? Well, that’s because of the enormous demand. Many retailers often overstock items to match huge demands. If the market preference changes then they need to stock other things that will sell and liquidate the surplus they have of the previous merchandise.
Some of the biggest e-commerce giants like Amazon, eBay and retail giants like Target and Walmart do this. There are big liquidation wholesale companies that buy liquidated merchandise from these retailers and then sell or auction them off to interested resellers.
What are Liquidation Pallets?
Liquidation Pallets are units where liquidation merchandise is often sold to liquidation wholesalers and retailers. A pallet will generally have multiple boxes each of which will have a bunch of merchandise in them. You can buy Liquidation Pallets directly from liquidation suppliers.
How to Get Started with Wholesale Liquidation Business
Starting a wholesale liquidation business might be the right thing for people who want to start their entrepreneurship journey. Of course, you have to keep your goals grounded and take calculated risks. Here’s a basic idea of what you should keep in mind while getting started with a liquidation business.
- Choose a Niche
Pick a product niche that you have good knowledge about, use regularly, or are passionate about. Whatever niche you pick, get good knowledge about it. What’s a quality product and what’s not?
- Get Licenses and Documents
Get the legal part of the business set up. This step takes time depending on your country’s laws about business and commerce. In the US, in addition to business licenses, you will need a reseller license to sell liquidation goods.
- Find Distributors or Suppliers
The next step is to look for good suppliers who can supply you with merchandise for your business. There are many directories and apps you can use to find suppliers. Maintain good relationships with them.
- Decide on Offline or Online Store
An online store is easier to set up and requires less capital. You can go for an offline store if you have the money and know you can get customers there.
- Invest What You Can Afford to Lose
Do not blow your entire savings. Initially, you will take some loss so keep enough money for multiple tries so that you can keep improving on each experience. Only use part of your savings. Do not take loans you cannot repay.
Advantages of Liquidation in Other Businesses
Let’s now look at some advantages that liquidation has in other businesses.
- Good Margins
If you can source liquidation goods from good suppliers then you can have a good profit margin. Many liquidation products are in good condition. They are generally overstocks or wrong-order returns.
You can sell them close to the retail price while you buy them at a very cheap rate. Of course, you have to find good suppliers and know what’s a quality product in the market niche.
- Shipping Cost is Less
This can happen when you have a good supplier who can ship multiple pallets in one truckload or if you are directly dealing with a big retailer who is supplying you with a huge inventory rather than going to multiple retailers and sourcing items pallet by pallet.
- Quality Untouched Merchandise
If you have found good suppliers then you can often get some good deals on liquidation merchandise that are new or unopened. These items come straight from retailers who are liquidating their surplus inventory.
Thus, you don’t have to sell damaged or second-hand goods. You can sell brand new merchandise which can attract more customers.
- Extra Income to Sustain Your Business
A good way to look at the liquidation business can be to treat it as a side hustle. Today, one can easily open an online store and sell liquidation merchandise. You don’t have to be actively involved in it.
Most of the things will be taken care of by the system of the platform you have opened your liquidation store on. This could be a good way to earn some extra money on the side.
- There is a Customer Base for It
Yes, some people actively look for liquidation merchandise because it can be cost-effective for them as well. If you are a wholesaler then there are a good number of liquidation retailers that regularly look for good suppliers.
If you want to get into the liquidation retail business then you can find direct customers looking for merchandise that is cheaper than the market price.
Liquidation wholesale business has become quite commonplace because of the increasing demands for goods which often leads to overproduction and overstocking. You can get into this business but do some research. Always formulate a plan of action before jumping into anything. We hope you found some good info from this post and wish you all the best.