Liquidation Inventory Buying

B-Stock Solutions has launched a new marketplace in Europe, called A2Z Liquidation Auctions.  If you take a close look at the site and its terms and conditions you can see that the seller here is Amazon.  There is a great mix of product available on the site. It includes new product as well as returns in a variety of lot sizes.  The product is located in the UK, but they seem to be shipping all over Europe.

I highly recommend that you get registered to buy right away.  There are some amazing deals available here.

According to the Commerce Department report released today, businesses accumulated another $90 billion worth of inventory in the third quarter.  This is an upward revision of the $56.8 billion reported last month.  Over the prior two quarters the total increase is over $100 billion.

This just heightens the importance of this holiday season to retailers and manufacturers.  If consumer spending doesn't materialize as planned, the amount of excess inventory that will be available in the secondary market could be truly epic.  Of course, if spending DOES materialize, the amount of customer returns we will see in January and February will also be off the charts.

Either way, secondary market players are poised for a great few months.  Hopefully, you have been heeding our advice to begin accumulating capital to be prepared to make some major buys this season.  After all, money is made in the secondary market when you buy, not when you sell.  If you can be buying at times of swollen supply you will get better deals and make more money (since the prices to end consumers will be little changed).

Great opportunity to acquire loads from Home Depot's Liquidation marketplace.  They are testing free shipping.  It may only be for a limited time and their are some constraints with respect to shipping distance, but it is definitely worth checking out.

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.

Due to the high level of interest in this topic, I created a page on this located here.

The AllTech Wholesale marketplace has been growing.  If you are in the market for used devices you should really check out the site.  Last week they started selling lots of iPads as well.  They ranged from 20 to 50 units each.

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.

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!

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.

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):

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.