It’s no secret that retail has only become more competitive, with big names like Amazon and Target running the game. However, this doesn’t mean that retail is “dying”, no matter what the pundits might tell you.
Sure, businesses have to adapt in the face of big box retailers, but the right tactics make all the difference. No matter what you keep stocked in your shop, you can likely benefit from liquidation sales and discounted merchandise to keep your shelves full and your customers happy.
What is liquidation?
If you’ve heard the term before, perhaps you associate liquidation with estate sales, business closures, and negative financial situations. While these do happen, that’s not the kind of liquidation that will make a difference in your business. For most retailers, liquidation instead refers to wholesale merchandise.
In other words, you’re going to be looking for larger amounts of products that you can get for lower prices and, in turn, resell to your customers for a profit. The profit margins are one of the biggest draws of liquidation, and they can make a major difference in your bottom line.
Depending on where you source your merchandise, this could mean a few different things. Some stores repackage gently used customer returns and sell them wholesale. Other retailers tend to swap out their seasonal merchandise every year.
That means that you can get unsold seasonal goods for a fraction of their original price. In the tech realm, outdated electronics and older products are frequently sold by the pallet to discerning buyers. All of this is liquidation.
Where to buy
If you’ve never browsed any liquidation sales, you may initially be overwhelmed. After all, there seems to be a never-ending cycle of liquidation auctions transpiring day in and day out. Before you start bidding, it’s important to decide what products you want as well as how many.
Depending on the seller, they may be willing to part with single cases of product. However, many wholesalers prefer to sell by the pallet. Needless to say, this is a sizeable investment and you need to be certain that you’ll be able to move that much product.
Oftentimes, finding a liquidation sale is simple as conducting a Google search. While you’re certain to find dozens of results, not all of them are going to be as trustworthy as others. If you enjoy the products offered by a specific retailer, browse through their website directly. Many retailers offer independent online auctions for wholesale merchandise.
Otherwise, research trusted liquidation services that facilitate the sale of goods.
Understand the selling process
If you’re thinking you can pick up a pallet of merchandise and sell it for precisely what the original retailer was, take a moment to think it over. After all, there’s a reason they weren’t able to push all of their product, so you might want to rethink your pricing structure.
This is where historical data can benefit you. What’s the average total on a customer’s receipt? How much do they tend to spend per product? With this information, you’re better able to forecast how you should price your items.
Otherwise, you risk alienating segments of your customer base, especially if any of them are familiar with the products you’re reselling. Price too little, you’ll see low profits — too high and you’ll struggle to sell. It’s a delicate balancing act.
Liquidation can benefit retailers in numerous ways but it does require a fair amount of research before you commit. Find a reputable liquidator or wholesaler and then determine what you want to sell and for how much. From there on out, you should be able to better position yourself to succeed.