Liquidation Buying Tips Feed

MRO (Maintenance, Repairs & Operations) inventory liquidation marketplace

Hdsupply logo

HD Supply has launched a liquidation marketplace for MRO inventory.  The site (located at https://sourcing.bstock.com) offers bulk lots of typical MRO type products.  They are all brand new, overstock products.

It is a great looking site that is worth checking out.


Furniture and Home Decor Liquidation Marketplace-Wayfair

There is a new inventory liquidation marketplace in the B-Stock Network.  They just launched Wayfair.com, the worlds largest furniture and home decor web retailer.

The site is located at https://wayfair.bstock.com and is offering full truckloads of products in good condition despite being returns.  The best part of all is that most lots appear to include free shipping in the continental US.

Check it out if you are a truckload buyer.


Liquidation inventory conditions

When looking at liquidation inventory, use your head!

I see it all the time.  A buyer gets there liquidation load of inventory and, guess what...there are a bunch of broken items in the lot!  They say, "but wait...I purchased "Customer Returns"!  Why did I get broken items?"

One of the problems with the business of buying and selling liquidation items is there is virtually no barrier to a buyer jumping in.  All you need is a little cash and you can get started.  Unfortunately, too many people do this without getting properly educated on what to expect and they don't think about what they are doing.

In the case of 'returns', you have to consider that these items were purchased by someone and then subsequently returned to the store.  Sure, sometimes it might have been the wrong size or color, but in many cases the item didn't function as expected or was missing parts.  Perhaps the buyer dropped it when opening the box.  Whatever the reason, retailers' liberal return policies allow that product to come back.

Please, please, please READ THE DEFINITION OF PRODUCT CONDITIONS associated with whatever you are buying.  If you don't find a clear, complete definition, DON'T BUY IT!


How to research retail prices when buying liquidation

When you buy liquidation merchandise you will almost always be shown the 'retail value' of the inventory you are purchasing.  It is extremely important to understand what this number represents when you decide what to pay. 

Generally speaking, the way you should determine the right price to pay, is to decide what you can sell the items you are buying for, decide what sort of margin you need to earn to stay in business and make a profit, and subtract that from the selling price.  Sometimes, it is a bit more complicated, however.

First, when you are presented a 'retail value' you must determine whether that is original retail, current retail, online retail or MSRP.  It is easy for sellers to pick a number that is well above what you can reasonably expect to get for the merchandise when you sell it. With consumer electronics, the original retail can be well above current retail because prices of consumer electronics products typically decline over time. In some fashion markets, MSRP is never the actual price. That is just a high price on the tag with a line through it.  It helps them establish a sense of value in the product.

So what should a buyer do? 

When you evaluate a manifest, I recommend you sort the list in descending order of retail value. Start at the top and search for each product online to find the price you could pay to buy that product right now. This is most likely the best price you will be able to get when you try to sell the same thing.  Work your way down the manifest filling in the best current online price next to each item. Don't forget to compare products in the same condition (if you are buying used, don't price it the same as new)! Once you have covered the products that represent 70 or 80% of the value of the lot you have probably gone far enough. 

Now, decide on the margin you require add in any additional costs, like shipping, subtract from the number you arrived at above and this should be your best offer.

Just remember, the ONLY retail value that matters is the one that a customer will actually pay you for the  products. Know this number and you can always buy with confidence.


Macy's liquidation inventory lots available

I am seeing an increase in the volume of Macy's liquidation product flowing through BStockSupply recently.  Listings like this one (registration required to see details):

Macys handbag  Macys fragrance  Macys jewelry  Macys watch

Handbags, Jewelry & Accessories by Michael Kors, DKNY, Vera Wang & More, 102 Units, Shelf Pulls, Retail $10,056, Myrtle Beach SC

This particular lot was started at around 7% of retail and has a current bid of around 9%.

These are very nice, bit-sized lots for the smaller buyer who isn't ready to commit to spending tens of thousands of dollars to try a new product type.


Walmart smartphone trade-in program

The announcement of Wamart's new smartphone trade-in program is huge. This is a clear indication that competition is going to continue to heat up in this lucrative market. It is also going to have implications on secondary market pricing for both retail and B2B purchases.

Walmart's backend provider for the program is a company called CExchange.  They will be taking all inbound units and processing them for resale or recycling. CExchange sells phones in a couple of ways: one is directly to consumers via their eBay store and the other is to resellers, in bulk, via their private liquidation marketplace, under the name AllTechWholesale and powered by  B-Stock Solutions.

The proliferation of trade-in programs is certainly going to impact the market over time. I believe the increased awareness of these programs will serve to pull tens of thousands of additional units into the resale market every month that would otherwise have simply aged in consumers drawers and garages. This should prove a boon for consumers as prices will ultimately have to decline to clear the market.

The great thing about these programs, however, is that the price paid to consumers for their phones changes every day based on the retail market prices of the devices.  This virtually ensures it will be a money maker for the folks involved.

So, for all of you resellers (or would be resellers) now is a great time to get registered and approved in their liquidation marketplace so you can jump on these lots when they start flowing. And, don't forget, B-Stock also already runs a similar marketplace for GameStop, so you should check that one out too.


Walmart liquidation TVs and other consumer electronics are back

After a brief pause, it appears that Walmart is again liquidating TV's, Home Entertainment and other consumer electronics on https://liquidations.walmart.com.

They are now requiring any interested buyer to sign up with an R2 or eSteward certified e-waste provider to ensure proper handling of the scrap.  You will find a simple agreement right on the site.  It can be signed in under one minute and you can be on your way to bidding.

New lots have ranged from full truckloads down to a few pallets.


Want to buy liquidation electronics? Get environmentally compliant first.

One of the most attractive corners of the liquidation market for buyers can be consumer electronics. Although it can be extremely competitive, the higher average price point versus other product verticals, like apparel, mean there is the potential to make more absolute profit per transaction.  For example, if you can squeeze out 5% profit on a $500 item (or $25), it is considerably more than making a 50% profit on a $10 item ($5).  If the time required to sell, pick, pack and ship doesn't change, you'd be better off making $25 for that effort vs. $5.

Other factors that make consumer electronics a compelling secondary market category include the depth of demand for these products worldwide and the limited sku breadth.  Clearly, the demand for certain products is off the charts.  For example, if you can get your hands on resellable tablets, you will have no problem selling them very quickly.  And, while there are different brands, models and configurations, it isn't like apparel where you might have 6 colors and 10 sizes and 4 widths for each model shoe. This promotes capital efficiency in terms of the required inventory you have to hold. 

So, what is the downside in the consumer electronics liquidation market? Primarily it revolves around environmental compliance. There is considerable concern among reputable retailers about where their returned e-waste winds up. No longer is this considered OK:

Roadside-e-waste-dump-in-lagos-nigeria-basel-action-network-sml

It is becoming more and more important to be able to demonstrate that you will responsibly dispose of any e-waste you acquire when buying liquidation inventory.  It is inevitable that you will wind up with some units that are either irreparable or cannot be economically refurbished.  You can't simply throw this e-waste in the dumpster out back.

In order to get approved to purchase these products from some retailers, it is becoming more important that you be able to demonstrate that you have a relationship with a certified e-waste recyler.  There are two primary certifications for these companies:  R2 and e-Steward.  Both are considered top notch certifications and suit the needs of most retailers and manufacturers.

By entering into an agreement with any one of the hundreds of companies certified by these two groups, you will put yourself in the upper echelon of liquidation buyers in terms of compliance and this will make you a more attractive buyer to those large companies worried about their inventory winding up in that roadside dump in Nigeria.