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.

For many buyers, the most common factor for making such product selections is the amount of money they have. Obviously low end items can be purchased for less while high end items will cost more. If you have the capital, you might be leaning towards buying high end items. Likewise, if you are strapped for cash, you might be leaning toward the more affordable products. However, the truth is that neither approach may be ideal because what matters more than the money available is knowing what will and will not sell.

Another factor for achieving success in the wholesale industry is understanding the market you plan to operate in. If you are going to run a flea market business, then having a bunch of high dollar items will probably not net you much profit, whereas selling several pallets of low cost items could. The same is true for using a platform like eBay where moving a couple of high dollar items is easier and generally more profitable than selling dozens of small dollar goods.

When it comes to reselling products online, I recommend signing up with Doba.com, so that you can try out some products without needing to buy huge lots of them. This will give you a good feel for what it’s like to sell products at different price points without taking on much risk.

In the end, there is a lot of money to be made in the wholesale market, but anyone who wants to achieve more than temporary success will take time to study the market they intend to target. Through careful study and an application of sound business principles you are highly likely to come out a winner in the low end/high end game of wholesaling.

But where do you find this liquidation merchandise? You can buy pallets and truckloads of merchandise from wholesale liquidators or simply buy direct from the original retailer who is liquidating excess, unwanted stock.

I should also mention that you can buy liquidation merchandise from Brokers. A liquidation broker is someone who finds liquidated merchandise and then connects that excess inventory with a buyer. The broker then charges a markup per item or commission on your total purchase price.

I probably do not have to tell you that buying liquidated pallets and truckloads direct from the source is the best way to purchase if you are looking for the lowest cost. Dealing directly with an inventory source removes the middleman (broker) and allows you to keep an inflated markup or commission in your own pocket.

Let me describe two categories of liquidation merchandise:

Customer Returns: Items that have been returned to the original store or catalog company by the end consumer. There are many reasons an item might be returned including: items damaged in transit, parts missing, the wrong color, the item didn’t match the description or impulse purchasing (spending without thinking).

Shelf Pulls: Items that have been on display at a retail store and then pulled off of the shelf for various reasons including: end of seasons model, new styles available, too many of one line item, etc.

Great question…thanks for asking! I remember wondering the same thing when I purchased my first pallet of liquidation merchandise. No, there is no industry standard and you should expect a pallet of merchandise to be shipped and wrapped differently each time. Manifests are provided for some loads, but this is certainly not the norm. The key will be asking the seller what to expect when ordering your pallet or truckload of merchandise.

Wholesale Pallets will arrive in a variety of ways including:

Completely shrink wrapped – Most second party liquidators will tightly wrap your pallet. I always appreciated the fact that pallet contents can be disguised if the shrink wrapping is black as I never want the truck driver who is delivering my pallet to have any idea of its contents. Maybe I worry without cause, but I know that most of my LTL (less than truckload) purchases are sent to a terminal where they sit for sometime before final delivery to my location.

I use the same freight carrier for most of my shipments and have gotten to know the drivers who deliver to my location. Each driver knows about the business I am in and they are fascinated by the idea of buying liquidation merchandise; I worry about that to some degree because I wonder if they get a little “too” curious at times prior to delivering my goods. Having my pallets shrink wrapped in tightly wound black plastic gives me some degree of confidence.

Open gaylord – This is the most unsettling type of pallet to purchase in that your merchandise is stacked in a large pallet-sized cardboard box typically with no lid or wrapping of any kind. Keep in mind that every source for liquidation merchandise will have different shipping and wrapping procedures, but I speak from experience when I say that a lot of loads from Sears arrive unprotected. An unsealed gaylord filled with customer returns is very common. How do you know someone in transit did not help themselves to a tip or gift…..you don’t.

Open Pallet, contents strapped – Large or bulkier items typically will come on a pallet and be strapped down. I have received pallets of bicycles, exercise equipment, appliances and outdoor furniture in this manor.

If you are going to be ordering from different suppliers and liquidators I think you can expect each load to be secured differently. My best advice would be to ask specific questions about how a single pallet or truckload is secured from its point of origin. Remember, if you are going to file a claim for merchandised damaged in transit and/or missing items, you need to do that immediately upon the arrival of your freight.

A freight bill or commonly referred to as a bill of lading, is a document you will sign upon the delivery of your pallets. Once the pallets are off-loaded, the driver will hand you a form to sign stating the correct amount of merchandise has been delivered. Before you sign this document make sure you perform an inventory and look over the pallets insuring no damage has occurred in transit. If you ordered 6 pallets and 5 of them are tightly wrapped, but the 6th one appears opened….you could have a problem. At this point I would put a phone call into your supplier to inquire about the load and how it left their shipping dock.

I have ordered and received hundreds of LTL pallets and probably an equal number of full truckloads of merchandise. In all of my experience I have had to file one freight claim. For the most part, I have rarely experienced a short shipment or load that I thought was compromised in some way.

Similar Posts:

Manifested Electronic Pallets
Liquidation and Closeout Definitions

Some of the items returned are restocked, but most of the retail returned items are sent to a distribution center and liquidated to entrepreneurs who are buying pallets and truckloads of name brand merchandise at a fraction of the original retail and sometimes wholesale value!

Who is really buying wholesale customer returned items?

Ebay Resellers: Type in a brand name next time you visit this auction giant and you will find an endless amount of eBay entrepreneurs who are selling everything from apparel to home décor items. Some of these sellers have discovered the ability to buy wholesale inventory direct from some of the largest nationwide department stores in form of customer returns.

Flea Market Vendors: With little overhead, flea market sellers are buying customer returned pallets and enjoying great success reselling well known brand name items at a fraction of retail pricing.

Brick and Mortar Stores: Small “Mom & Pop” stores are purchasing wholesale pallet returns because having access to name brand merchandise is tough to come by.  Buying wholesale shelf pulled and customer returned items gives the small retailer a way to offer name brand merchandise and the ability to finally compete with the larger retail chains.

What to expect when buying  customer returned pallets:

Pallets of customer returned items will vary in size and product conditions. Some retail returns will merely be open box, while some returns could actually be damaged and/or missing pieces and parts. Pallet sizes will range based upon the size of the merchandise contained, but typically will be 5-7 feet tall. You can expect to find a wide range of pricing when buying pallets of customer returned items from a low of $200 a pallet to a mid-point of about $750.

How to purchase pallets of name brand merchandise:

If you are looking to start an online auction business or maybe open up a flea market booth, you might find a goldmine buying retail returns. Pallets can be purchased from wholesale liquidators who specialize in buying truckloads of this merchandise and reselling in smaller pallet size quantities to those who are involved in some aspect or retail reselling. Google the term “wholesale liquidator” and you will be able to begin your search from the thousands of results!

I am thinking of starting off small with cosmetics to sell online and at flea markets and possibly on trademe.co.nz for New Zealand customers (they pay through the roof for everything there). I know makeup will sell and it will be easy to ship since they’re light. Since I am a woman I know a lot about makeup lol!

I’m not sure where I should source the product from Australia or America? I am still in the research stages so any input, suggestions or advice would be greatly appreciated. Is it wise to start off with cosmetics? My plan is to start off small and make enough money for a buffer and to research brokering and dropshipping further.

I also have an idea of having liquidation sales (like you say in your book) in New Zealand as like I said they pay through the roof for everything as there’s no competition there and I know the place like the back of my hand as well as my father having a lot of business contacts.

Thank you for your time, I look forward to hearing from you.

Kind regards,
Casey

Hi Casey!

Forgive me for saying this, but I think you have the fever that bit my wife and I some years ago. I can tell you are excited about the prospect of starting your own business reselling liquidation merchandise. It is invigorating at the very prospect of being in charge of your financial future, huh? Starting a business from home can be exciting, I remember when my wife and I took the plunge some years ago.

Having said that, I want to make sure you do not make the same mistakes I did and get a little too excited. I went in many directions and as a result, I spread myself too thin. My first suggestion is to simply decide where you want to start. Will you start with online sales and if you do will it be through an auction format like eBay or will you start your own e-commerce store? As you stated in your email…start slow and if you get one piece of advice from my guide or my emails – make a business plan and stick to it. Doors will open up for you as you gain success and growth will happen in your business if you stay focused.

If you intend to resell small items (as you mentioned makeup) you could import wholesale lots from the US. Try a few test orders before you make a large purchase to get a feel for customs, time in transit and merchandise quality. As far as buying authentic name brands there is plenty of information online through Youtube and guides that have been written on eBay to help you learn how to spot fake products. Be careful in this area as there are a ton of fake brands like Mac, Clinique, Bobby Brown, Smashbox etc. Use Google to research fake cosmetics by typing different search terms including: Fake, Knockoff, Authentic and other search terms.

Casey, I want you to stay in contact with us. Please make sure to email further questions and let us know how your business is progressing. I would love to hear about what direction you have decided to start with. I am glad you found value in our guide, make sure to check out and investigate some of the suppliers we have given you. Take care and good luck!

Dear Robert,

I met a guy other day who is involved in closeout business from china, India, Bangladesh etc. He told me he gets all closeout offers from different countries. He was reluctant to give away the information,which is understandable. Can you please guide me as to how can I register with international factories who sell excess inventories, overstock/closeouts? Your input in this matter would be highly appreciated.

There are plenty of manufacturers overseas who will sell off closeouts and some of the best offers come as a result of canceled import orders!

Let me explain a little further:

Various importers as well as large chain store buyers will contract with overseas manufacturers to produce a line of items often with strict completion deadlines placed by the importer. If the factory cannot meet rigorous guidelines placed by importers, often goods will go unsold and most of the time can be purchased inexpensively by you and me.

Another example would be a manufacturer who completed an order and then prepared it for shipment by placing in a freight container only to never hear from the importer again!

When this occurs a manufacturer must quickly recover lost money by liquidating this stock, often at a loss.

How do you find deals like this?

Your business needs exposure, without contacts you are dead in the water. One of the best ways to do this is through advertising; build a simple website explaining the nature of your business and the fact that you are involved with importing and wish to purchase loads of closeouts and manufacturers overstock. Let the contacts come to you with this method. Once you have a virtual business card (website) you then can connect with The IMASD, which is a large association of surplus dealers. Leads come in daily from this directory.

Another way to accumulate contacts would be to take advantage of the services of Global Sources. This company connects importers with manufacturers and could prove to be an invaluable resource for sourcing manufacturers closeouts. Global sources offers supplier catalogs that allow you to contact prospective factories to develop buying relationships with. The catalogs cover multiple categories of merchandise. I would contact as many manufacturers in your chosen niche and let them know you are interested in closeouts, odd lots and canceled orders.

Global Sources helps buyers reduce risk when sourcing from Greater China and Asia by providing the following supplier verification services:

Verified Suppliers: Global Sources visits each featured supplier personally – 3 or more times. Each supplier has shown its commitment to export, plus, we verify all information possible before we offer it to you

Credit Checks: Using Global Sources you are able to access the most comprehensive credit reports – up to 13 key financial and legal areas – provided by Verify Screening Solutions and Sinotrust

Supplier Capability Assessments: You can get supplier assessments across 12 categories provided by Bureau Veritas, one of the world’s most-trusted certification authorities.

In this conversation several members of this forum are discussing the pros and cons of sourcing merchandise to resell on eBay. The following message was left for my wife in a personal mailbox and we thought we would address the questions here on our blog.

“Hi! I posted a reply to your and eBayCoach’s lively discussion. I’d like to find out if you’d be willing to offer some advice to a person in my shoes. In a nutshell, I’m a pretty good business woman and want to grow/develop an online sales business. I’ve read several books on the topic, but just want to understand what a day in the life of a successful ebay seller looks like? Assuming that the seller makes a good salary and isn’t scouting daily for items. Also, how much money will I need to invest in inventory and how much will I need to invest in management systems/staff.

I really appreciate you and any response you might have. Now, if you have any questions about California Real Estate, or Foreclosures, I can answer your questions! HAHA!

Thank you……Meredith”

Before I respond to Meredith’s comments above I want to steer our readers attention to another individual who was involved in this thread and her name is Suzanne Wells. She is affectionately known in several circles as the eBay Coach. Suzanne offers in-depth advice for eBay resellers showing them how to find inventory via garage sales, thrift stores, product coupon redemption and other creative ideas. I strongly encourage our readers to check out her blog a become a faithful eBay Coach follower. Suzanne is also the author of a very successful book titled, Stay-At-Home Mom’s Guide to Successful eBay^® Selling and her blog can be found Here.

Lets move forward with my response to Meredith:

Hello Meredith, allow me to introduce myself…My name is Robert Cyr. You had sent a private message (above) to my wife on the WHAM forum. My wife was involved in a forum thread talking about dropshipping versus sourcing items to resell via thrift stores and garage sales. Both are viable ideas, but Lorie (my wife) was trying to press upon the readers there that spending hours hunting for merchandise to resell can become very tedious.

Let me back up a moment and fill our readers in on what I am talking about. There are great deal of eBay resellers who will find inventory by traveling from thrift store to thrift store looking for items to resell. In addition, sellers will also travel the garage and yard sale circuit looking for items that might fetch a strong dollar on eBay. Many of the items sought for resell are vintage or collectible.

My wife’s intent was to reveal that there is an easier way to source items for resell including dropshipping and purchasing bulk lots of liquidation merchandise.

A great deal of people responded in this thread because many who use the “Scouting” method to source merchandise to resell absolutely love doing what they are doing. They are passionate and get excited about the prospect of finding a rare piece of china or a highly sought after book. Items like this can bring a huge markup on eBay.

There is however a segment of people who cannot spend hour after hour hunting around thrift stores or garage sales, but want to be successful on eBay. Maybe some of these people live in rural areas where shopping for inventory is not an option.

The other negative thing about hunting for eBay merchandise is the fact that you can never be assured a steady supply of merchandise to resell. One week you might find a ton of stuff, while the next week might yield very little.

Now that I have everyone up to speed…I will answer some of your questions:

QUESTION: What does a day in the life of a successful ebay seller look like?

ANSWER: It is all glitz and glamor. I wake up at about 10 and watch TV for hours on end – yeah right! Selling on eBay is harder than most 8 to 5 jobs because you are never “off”. You wear many hats as you are in charge of product sourcing, marketing, shipping and customer satisfaction. You really have to be intent on being in business for yourself as the entrepreneur lifestyle is not for everyone.

QUESTION: How much money will I need to invest in inventory?

ANSWER: Start small. Being successful on eBay is about trend watching, testing the waters and careful research. If you find a source of merchandise from a wholesaler, manufacturer or dropshipper,  make sure you research historical completed auctions to see what a particular item has sold for. Is eBay flooded with this product line? Can you compete with the pricing your have found?   How much stock is available and can you get inventory ongoing? Make small purchases at first and if sales pickup you can buy in bulk at a lower cost per piece.I really think you can start with an investment of $100-$200.

eBay is all about marketing and staying on top of consumer spending trends-

“Robert …..I originally was thinking farmer’s markets and garage sales. My friend put left overs of jeans and shoes “new” she had purchased in my garage sale last year and fared quite well. I am building a business separate from this but saw this as an opportunity to bring in a little cash flow while I’m building my business. I recently left my job to afford myself the time. I think the apparel I just purchased would probably bring in more on Ebay but I haven’t sold anything that way before. I also had the idea of taking a variety of merchandise based on what I get for a good deal and take it to the different time share resorts to the sales reps. I live in Orlando…time share mecca…also I was in the industry for 10 years so I know a lot of reps. My husband took some of the apparel “Marisa K” (shelf Pull) and sold 2 for $80. He is taking more today. I think “new” jeans and designer apparel would do well with these people. People are always selling things at the resorts to the reps…flowers, movies, whatever. I think the new children’ clothes would do well in a garage sale…I live in an upscale neighborhood my clothes (used) always do well. I would like toys as well. Sorry this is so long, I need an editor…Great book by the way…very helpful.

Tracy”

Tracy, thank you for taking the time to share some ideas with us. I think the overall message you have sent in your email really explains the point I have always tried to make: Be creative when trying to resell wholesale liquidation merchandise.

If your intent is not to build a huge business selling shelf pulls and customer returns, but rather make a few extra bucks here and there, I think you are off to a great start!

In review, here are a few ways to make a quick buck after buying a Wholesale pallet of merchandise:

Garage or yard sales

People love to go from home to home in search of a bargain. You can capitalize on this following by running an ad in your local paper and make plenty of visible signs showing potential customers how to find your sale.

Craigslist

Place ads on this free classified network selling wholesale liquidation merchandise. I do not think I have to tell you that this website receives hundreds of thousands of visors each day looking for a bargain. You have the ability to upload pictures just like eBay.

Hold a Resell Party

This is where you get a few girlfriends together and ask them to bring a friend with them to an evening of finger foods at your home. This idea is similar in concept to the Tupperware or Mary Kay events where everyone laughs, eats and buys merchandise. You can use this idea to resell handbags, clothing or just about anything else you can think of.

Trunk Sales

Trunk Sales are very prevalent in the Eastern part of the United States. This is where you pull to the side of the road and open up shop. Before you try this method make sure you meet local ordinances, which might require that you have a permit to operate. This permit is often know as a peddlers license. In my hometown I have come across people selling all kinds of merchandise on the side of the road, most attracting many customers.

Today I want to introduce you to a company called Margolin Shoes & Apparel. You can venture to their website at www.closeoutplace.com.

Margolin Distributes wholesale name brand shoes such as Adidas, Reebok, Fila, Converse, Puma, Skechers, Doc Martens and more at approximately 50% off regular wholesale prices. In addition to shoes and boots, they offer a wholesale selection of NFL, NBA, NCAA, WNBA, MLS, MLB, and NHL licensed team apparel.

I have taken the time to cross reference some of their advertised prices of boots with closed eBay auctions. I was surprised to find Doc Marten boots closing on eBay with several high bids. Take a look at the following PDF files I have put together showing wholesale liquidation pricing from Margolin and then closed eBay auctions for advertised stock:

Wholesale Dr Martens Boots 1
Wholesale Dr Martens Boots 2

Margolin Shoes & Apparel
2701 N Kildare
Chicago IL 60639
773-252.5222

If you are looking for a niche area to specialize in for eBay sales, this company just might work. I would suggest calling and asking a few more questions about setting up a wholesale account and discussing minimum purchases, refund policies and see if you can get a couple of references.