• “What grade is the merchandise?”

Closeout merchandise can vary drastically in quality, and so it is imperative that you have the seller describe in as much detail as possible the type and quality of products you’ll be receiving. Remember, there can be significant differences between the myriad types of liquidation merchandise – salvage, shelf-pull, and overstock are all definitions you should make yourself familiar with before picking up the phone. You can check out our post on liquidation terms if you are new to these or simply need a refresher.

It is important to verbally ensure that you and the seller are on the same page when it comes to the quality of the merchandise, as descriptions can sometimes be (purposely or not) misleading. You may wish to ask if there will be many repeats (many of the same exact items) since, depending on your outlet for selling, it may be difficult to sell multiples of the same item.

• “Is There A Return Policy?”

Are returns accepted? Under what conditions? Who pays for shipping on returns? Many closeout sellers may not offer returns, which again makes it imperative that you ask specific questions about the quality of your liquidation lot and conduct the appropriate due diligence on the supplier.

• “Hey, How About A Discount?”

Okay, you don’t have to ask this one, but the real question is why wouldn’t you? Don’t be afraid to negotiate! In this business, few things are set in stone, and the worse a business can do is say no! Also, how about “If I order more can I get a better price?” Take a minute to find out if your supplier will give you a better price based on volume – if you’re not ready to by a large volume yet, at least you’ll have a good idea of what you might be able to save on future purchases.

Additionally, if a company has too high of a minimum order for your taste (or your budget), don’t be afraid to try and negotiate that down.

Keep in mind that by asking these three essential questions, you will be able to get the most out of your supplier and greatly benefit your closeout business.

Customer Service – The Human Factors

First and foremost, a solid customer service approach requires being proactive with your customers. Being proactive in this case means going the extra mile, beyond smiles and other salutations, to an environment that exudes caring, sincerity, and efficiency, as well as expert product knowledge.

If you have employees, strive to make sure that they possess the same proactive zest for the company’s success as you do. This can be accomplished by having regular company meetings to get everyone updated on the latest developments and providing incentives for achieving high customer satisfaction.

Another important factor that is often missed in communication with customers is the ability to take the necessary time to listen and ask the right questions. It is common to see a sales person talking, and talking, and talking some more. However, in order to display active listening skills, it is essential to get into the mind of the customer to find out such details as:

What type of product are you looking for? Are you looking for a specific style, brand, manufacturing year, etc? Would you consider an alternative product having similar features?

By engaging the customers to specifically address their wishes, you will be able to gain their trust and respect, leading to a higher likelihood of a successful purchase.

The above points are very important for effectively engaging with customers. However, it is equally crucial to not come across as too aggressive, as there’s no doubt that we’ve all been turned off at times by a pushy salesman. So while it’s okay to push a little, try not to push them right out the door! The key is to tactfully observe when the customer is reaching a saturation point, and just before that, allow them some room to analyze what they’ve heard and seen, before agreeing to going ahead and finalize the purchase.

Customer Service – The Technical Factors

Customers hate to repeat themselves, and feel valued when we remember their preferences and dislikes. The good news is that you do not need to be a member of Mensa to remember every customer, you need only to take notes! Keep notes on any pertinent data that will make future interaction with your customers as personalized as possible. This information should be organized and readily available (at the tap of a few keystrokes), so that it is handy whenever a customer should call or visit.

Repeat customers will be highly impressed with the type of service they’re provided, as most other wholesale providers are not as detailed with personalizing and customizing their customer service. The time taken to enter and maintain a customer record will be worth it, and can be done with relative ease once the customer departs the store or hangs up the phone. If you have a wholesale e-commerce website, the customer profile section will provide a seamless method of collecting this practical information into a database for future use.

Bring It Online

Correspondingly, it is important to have an online presence, where customers can gain more information about your business and the wholesale products you are selling. Who hasn’t “Googled” a company before giving it a call? Most of us have, so it’s surprising that only 56% of small businesses have a website!

Since a website is a great marketing tool, push yourself to go beyond simply offering an online profile page, such as a LinkedIn or Facebook page, with just your business name, street address, phone number and email address. The professional look of a full fledged site vs. a simple page could make all the difference in attracting customers.

If you run the type of company that answers the same questions over and over, then consider adding a FAQ (Frequently Asked Questions) page to your site. Moreover, include sections on your site for shipping and return policies and add plenty of testimonials from existing customers. Notably, when adding content to your site, keep in mind all of the customer service tips mentioned above, to create a true and consistent sense of helpfulness in describing your business offerings.

Also, you can grow your customer base by increasing your web presence, basically using simple steps such as targeting your local customers through the addition of your company to Google Places.

Remember, word of mouth is actually stronger now than ever. That’s because we have so many ways to easily communicate with a wide range of people. It takes only a few seconds to blab on Facebook about a bad customer service experience! Thankfully, it also only takes a brief amount of time to tweet or blog about a good experience! So, whether you’re dealing with one of your most lucrative customers, or a prospective client who is seeking a small purchase, always treat every customer as if they are your biggest and best.

Here’s what you will need to establish an online presence for selling your liquidation merchandise:

• Choose and Register a Domain Name

If you’re confused on where to start, well, first thing’s first – you need a domain name for your website (you know, a web address such as www.yoursite.com). Probably the most advertised and popular place to find and register a domain name these days is GoDaddy. There you can see if your desired domain name is available, and then proceed to register it. Also, unless you’re also looking to get hosting or other products from Godaddy, you can skip all the upsells that they will try to offer you. Keep in mind that your domain name should not cost more than ten dollars, unless you’re going with a rare extension – e.g.: .biz, .mobi, etc.

• Pick a Web Hosting Provider

All website owners require web hosting, and there are lots of inexpensive, high quality web hosts that can provide more than enough resources and features for building a new website. I suggest seeking a host that offers 24/7 365 phone support, as it’s best to be able to receive assistance via voice (rather than live chat), if you should need technical assistance. Also, search around for a host that offers complimentary templates as well as shopping cart service. It’s best to contact potential hosts ahead of time, especially if you foresee requiring significant assistance, so that you can confirm that the site you have in mind can be supported as well as to discover whether any tools or advice are offered to help you along.

• Put The (Shopping) Cart Before The Horse

Some of you may be looking to simply have a website as an advertisement for who you are, and for prospective customers to read about your wholesale product offerings. However, I would think most of you would also like to give potential customers the opportunity to purchase goods directly from your website. This is better than operating by phone, as it means that you can make sales even while you sleep. Your web host may offer a free shopping cart or be able to recommend one to you. Be aware that most of these shopping cart applications offer a wide variety of features, but if you have specific needs, verify that they are indeed supported by the software you choose. Common shopping cart software include Zen-cart, Volusion, CoreCommerce and a host of others.

• Apply for a Merchant Account

Now if you’re going to sell online, you’re obviously required to accept payments, and most customers will prefer to pay by credit cards, which means you will need a merchant account. Merchant accounts can be obtained through your banking institution or via various companies online. Once you purchase a shopping cart software, their representatives will be able to provide you with assistance and detailed information on integrating your merchant account with your shopping cart. Also, keep in mind that you may need a payment gateway provider (such as authorize.net) to properly process your customer’s payments online.

• Unique Product Descriptions with Photos

Clear, professional photos and unique text that describes your products will provide a huge advantage in how well your site converts visitors to customers. Take the time to write exciting descriptions and provide as many details as possible, as this will help users find you using search terms and will also make you stand out from competitors.

• Don’t Forget Customer Service!

This means not only having a very easy to find “Contact Us” page but also letting customers know when is the best time to contact you (your business hours) and alternative contact arrangements (such as email). Remember, by using the Internet your customers may originate from anywhere in the world and, therefore, contacting you during what is considered the norm in your local timezone may not be convenient for some of your prospective clients.

These are the main requirements for offering your closeout liquidation merchandise through your very own website and, when done right, should result in a significant boost to your sales.

The first and perhaps most important rule for new buyers of wholesale liquidation merchandise is to research, research, research! Don’t make the mistake that many folks do and rush into your first wholesale investment only to later discover that you’ve jumped the gun and made a risky transaction. If practical, try to conduct your first transaction with a company that is in your local area. By doing so, you will be able to see the available goods before deciding whether or not to make the purchase from this wholesale supplier or a different one.

Ask questions – Even better, research terminology beforehand and ask SPECIFIC questions. Know the difference between shelf pulls, factory overstocks, salvage goods other types of wholesale merchandise in order to have a good idea what to expect. Also, ask specific questions about the condition of the merchandise, and the variety offered. For example, if buying a lot of clothing, you probably will want to ensure there is a strong variety of styles included in your lot, and not simply hundreds of the same shirt, with a few others thrown in.

If you have already found a company that sells what you’re looking for – you’re not done yet! Take additional steps to ensure that it is a legitimate company. Don’t hesitate to ask for references, as solid companies should have customers that are able to vouch for them. You may also want to ask to see a copy of their business license or request their tax ID number – not that these are hard to get, but it is a little added confidence that you are not dealing with a fly by night company that won’t be there to offer you support in a few weeks time.

Also, you can use the Internet to search what other customers have said about that business, including any outstanding complaints. A couple of sites you can check out include ripoffreport.com, the Better Business Bureau website as well as the various online forums where the wholesale industry is discussed.

Now that you’ve ensured that the company you’re dealing with is reputable, learn additional information about completing a successful transaction by reading our article on purchasing closeouts safely.

• First consider that you get what you pay for:

While some merchants price their counterfeit merchandise at normal prices, as to avoid suspicion of selling fakes, many sellers offer rock bottom prices that are, frankly, too good to be true.

• Product Quality Matters:

Besides price, quality is usually the clearest indicator that an item is not authentic. Very few replicas will have  a consistent high level of quality, especially in comparison to the fine detailing of real wholesale designer bags. For instance, there will be no stitching errors or mistakes on the authentics. And the material itself will clearly be of a higher grade. Detailing on the bags should appear flawless.

• Consider the location of the seller:

Generally, when you conduct rigorous due diligence, you can come across a variety of good quality merchandise from overseas suppliers. However,  when it comes to designer fashions and bags, it is necessary to be more vigilant with sellers from overseas, as many countries do not have the same strict intellectual property laws that we do, which leads to an increase in counterfeit goods.

• Too many of the same model available:

Any wholesale goods supplier that offers a a single item in large quantity should be researched further. While you might be able to buy a large lot of wholesale Coach handbags, it’s very unlikely that a supplier would have a large inventory of a single model of a Coach handbag. This, except in rare circumstances, would indicate that the goods are illegitimate.

• Presence and Quality of Monograms:

Many high end fashion designers monogram their goods. For any designer good you are interested in selling, take some time to research their monograms (including their appearance and their likely location). If the goods you purchase do not have the right monograms, you have a sure fake on your hands.

Locating legitimate wholesale designer handbags and clothing can be a difficult task. It may take further investigation to ensure that you are only buying (and selling) real designer merchandise. The good news is that if you are careful and patient you should be able to purchase quality designer merchandise that is both legal and will be much appreciated by eager shoppers.

Many of you will immediately think of eBay when it comes to selling goods online, as it’s easy to use and it seems that just about everybody already has an eBay account. However, while eBay is a viable option, it’s certainly not the only venue where you can sell online. This is particularly true if you are frequently buying the same kind of wholesale closeouts, as it will ideally position you for establishing your own niche e-commerce store in which to sell your goods to consumers.

While there are some setup as well as ongoing costs associated with opening an e-commerce store, your benefits include having much more control than when you sell through eBay and you are, of course, spared from the large (and often growing) fees that eBay charges sellers. It’s also a lot easier to advertise your own store, which can be done both offline and online. An e-commerce store can also make a great addition to a brick and mortar store and will help you to keep customers that enjoyed your products but prefer to do at least some of their shopping online. You need not be a tech geek to do this, as there are many relatively easy to set up e-commerce solutions available from a variety of providers.

You may also want to consider becoming active in some of the major social media platforms, as consumers are seeking out retailers (and e-tailers!) through Facebook and Twitter. In fact, according to the Compete.com report referenced above, thirty one percent of online shoppers describe using the Facebook pages or Twitter feeds of retailers they’re interested in. This is almost double the amount of users who did so in late 2009. This is an obvious trend that shows continuing trends for growth.

So what kind of liquidation closeouts and wholesale products should you be seeking to get your hands on? Well, there are the obvious, long-established consumer favorites such as movies, music, video games and books. However the truth of the matter is that with more and more consumers turning to the internet, any item you are able to receive good margins on can, should and will be sold online.

For example, the promise of repeat sales from someone who is looking for a long term business relationship can be an incentive for a supplier to reduce their price for you. Naturally, if you have used the supplier in the past and already have such a relationship, make sure to continue to (politely) push for any possible discounts. Furthermore, be sure to seek discounts for large volume purchases, as the savings should grow when you buy in bulk.

It’s also important to shop around if possible and if you find a better deal (with proven similar quality merchandise) let your supplier know as he may be willing to lower the price in order to keep your business. It may also be possible to commit to a longer term agreement of repeat purchases with the supplier in order to ensure both parties are satisfied with the end result of the negotiation.

It’s also important to never accept an initial quote as the final, since most suppliers consider this to actually be the starting point and expect to lower their prices somewhat. Furthermore, if you’re new to the closeout industry, and negotiating in general, just remember that practice makes perfect and you’re bound to become a better negotiator over time.

The most obvious benefit of sidewalk vending is the fact that, if the right location is chosen, there will be a fairly reliable amount of foot traffic. However, before you go setting up a vending cart at a busy intersection, make sure to get some vital information first. You will want to make sure that the area has lots of foot traffic for more than once a day and preferably has a steady flow of traffic. Also worth a great deal of consideration is the price point that your potential customers are likely to respond to. If you price things too high, your potential buyers may not be able to afford it. However if you price too low, they may think that what you are selling is of poor quality.

One of the problems you may encounter when using sidewalk vending as a means of selling is the issue of city regulations. While most cities only require you to have a business license to operate as a sidewalk vendor, some cities have them outlawed completely or require special licensing. Make sure to check your local laws and regulations before setting up shop. Also realize you probably were not the first person to think of the idea. Make sure that if there are other vendors in your area, they are not selling any of the same merchandise. Finally, sometimes you will want to operate on private property. If this is the case you will generally need to come to some kind of rental agreement with the owners of the property.

The ideal way to purchase any closeout or liquidation product is with an open account, as in purchasing on credit. This is ideal because there is little to no risk of fraud as you pay only after you have received and inspected the merchandise. It also is helpful in terms of cash flow, as generally purchasers have thirty days to pay the invoice which gives time for the purchaser to make some sales before paying. Of course, not all liquidators and wholesale companies allow for open accounts, especially to new buyers. However if you are repeatedly buying from a company that does not provide you with an open account, it may be something to push for.

Of course if you are unable to buy on credit then you will have to pay in advance. This is obviously more risky as there is the chance of of goods arriving in poor condition, or not arriving at all. However, some payment methods provide the buyer with more security than others:

Using a credit card such as Visa or MasterCard can help purchasers protect themselves against fraud. Of course, this also provides the benefit of the buyer not needing to pay directly for the merchandise until the agreed upon time with the credit card company. Also both Visa and MasterCard offer protection should their be issues with items not arriving or having the incorrect items shipped. Users may be able to request a charge back in either of these cases, but it’s best to check with the card company beforehand to ensure that your purchase would qualify for such protection.

Using a reputable escrow company, such as Escrow.com can be useful for trades taking place both domestically and in many cases internationally (not all escrow companies are available in all countries). Escrow services act as a third party which oversees the transaction. Generally the purchaser will send the money (via wire transfer or credit card) to the escrow service, which will then hold the money until goods are received. The buyer then has an pre-agreed on period of time in which to inspect the goods and release the funds. If the goods are not adequate they can then be shipped back, and once verified, the funds are released back to the purchaser.

There are also payment options which are to be avoided as they are high risk and frequently requested by less than reputable suppliers. Never send money via Western Union or similar services directly to a seller that you have never used before since, for if you do not receive the products, you have little to no recourse.

Even if you only go from show to show, chances are you will revisit some of the places you have been before, especially those that you experienced success at. Chances are also pretty good that some of the customers that visited last time, will be there again. This creates a unique opportunity to brand your wholesale merchandise. For example, maybe you plan to sell vacuum cleaners at each show. If you want to create a successful brand for your wholesale merchandise you will not only focus on brand names such as Hoover, but also make sure they are in good working condition before selling them. This effort relates into more people trusting your business, and thus becomes a powerful part of your brand.

Be careful however, as it can be quite easy to ruin your brand. All it takes is one highly defective product and you might find that your sales begin to reduce drastically. In order to make sure this does not happen, it is vitally important that you make sure each and every product you sell is offered in the condition you advertise. If you claim something works and then the customer brings it home and it doesn’t, word could spread quickly (especially in smaller towns) and cause you a lack of sales at future shows.