• “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.

• 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.

Most of the companies you will be looking to purchase from have what can seem like a substantial minimum purchase requirements for those starting out with limited funds. So, the issue at hand is: How can someone without significant funds begin selling wholesale merchandise? Well, the truth is there are some techniques for making purchases which don’t require the stated minimum purchase amounts.

Communicate Effectively, Politely and Honestly

Call the company you are wanting to purchase from and let them know that while you’re a startup company that is currently unable to commit to their minimum order, you do have plans to not only offer them your repeat business, which could be quite profitable for them in the long term and that you’ll also be making larger orders in the future.

It is very important to call and speak with someone, as emails are too easy to say “no” to, or simply ignore altogether. Even if the first answer you get is a rejection, try other companies as well – your business is valuable and there will be reputable companies who want it. The prospect of larger orders in the future and repeat business is hard for any supplier to turn down, so do not give up. Additionally, do not lower your standards of companies you will buy from, or take unnecessary risks with companies that do not seem reputable.

Be Prepared To Give A Little

Usually the more you buy, the cheaper the prices wholesale companies are able to offer. This goes to say, if you are looking to purchase goods at below a minimum order you may be asked to pay a little more. As long as the increase is not substantial and will still allow for you to ensure a healthy profit, this may allow companies to sell to you despite not making their minimum order requirement.

Consider A Dropshipping Agreement

If you’re starting out with a very low budget, you may want to consider dropshipping as an alternative. Dropshipping generally does not require any minimum order, as you are not actually purchasing merchandise in advance, but on an ‘as sold’ basis, where the supplier ships the merchandise directly to your customers. This can be a viable option if your goods will mainly be sold online or via catalogs.

Using the above 3 approaches should get you on the right track for selling wholesale goods on a limited budget.

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.

All kidding aside, you too can become a detective and today I want to reveal another way I can “sniff out” product sources. This technique will cost you about $3-5 dollars, but the results can be priceless in the form of saved time and money!

Go to a website called Copyscape. Copyscape offer the ability for you and I to check a website or even a block of text for plagiarism. You see most Brokers and dropshippers will actually “cut and paste” product descriptions into there own websites right from their source! You can use Copyscape to find duplicate product descriptions. I have an example that I will share with you, in fact, click the link below and a new window will pop up with a PDF file. This PDF file will reveal three different websites qcabusinessdirectory(dot)com – Viatrading(dot)com and c2wholesale(dot)com. All three websites are offering the same liquidation product: Assorted Game Boy Games.

Here is the example file

In this example Via is the source for this merchandise, while the other two companies are simply taking your money and then ordering from Via. Once they place the order they have Via ship to your door. I do not know about you, but I would rather buy from the source.

How did I find these three websites? Well, I found the product that I thought was a reasonable deal and then went to Copyscape and pasted some content in to the content box. I then hit search and it returned several different websites that had the same content listed – G47 – BINGO!

Now this tool comes with a cost…..you have to pay one nickel per search. I think you I funded my Copyscape account back a year ago with $5 and I am still searching to this day. In this circumstance a nickel per search goes along way. Copyscape offers the ability to search for free by putting a web address/url into its search box, but you really need a premium account to get good results. A premium account allows you to enter a block of text to search for duplicates or plagiarized content.

Will this sneaky trick work every time? No, but it has worked for me and I have found many actual product sources for liquidation merchandise with this technique. I will give you one hint though…when searching using a block of text use obscure content you find in a product listing. Look back at my PDF file and you will see each listing has the following sentence: Great variety of popular game titles and approximate breakdown….Copyscape was able to find several pages that used this combination of words.

Elementary my dear Watson!

Having said that, here are a couple of reasons why buying from a wholesale liquidator might make sense for your business:

1. Sometimes the “Direct Source” might be a third party liquidation company who owns an exclusive contract for re-distribution of closeouts and shelf pull merchandise from a particular retailer. So, for example, Jacobs Trading is the contracted liquidator for Walmart and Sam’s Club liquidation merchandise. If you want to buy returns from these two stores…You must go through Jacobs.
2. Large, reputable liquidation companies will buy in huge quantities and then turn around and resell to you in smaller quantities. Let me explain: Not everyone can afford large initial purchases when starting a new business. Buying from a trusted liquidator allows you to make a smaller purchase to “Test the Waters” before investing in truckload quantities

The old adage, “If it sounds to good to be true, it probably is” should be closely followed in the world of wholesale liquidation merchandise. With a click of a mouse anyone can view countless websites offering endless amounts of wholesale merchandise for your new or existing retail business. There are several steps you can take to research liquidation companies before you make that first purchase. The worksheet below should be used as a guide to evaluate Internet wholesale companies who you are thinking of buying from. Please note the suggested steps will not guarantee a successful transaction. We have a list of questions you should pose and a suggested method of researching “public” knowledge, which will aid in your decision process. Obviously, if you learn how to “harvest” adverse company information you can then become more informed before offering your credit card for that initial purchase!

Remember, spending time researching a company can potentially save you thousands of dollars! Our worksheet is just a starting point, you should continue investigating and to be 100% safe I recommend you visit the company (in person) you are going to buy from. Spending $300 – $500 on plane ticket will certainly be a wise investment.

It got to the point where I would say, “Are you working through the Quicksell program?”, if the answer was yes… I would hang up. I know this sounds rude, but in the beginning when I responded to all of the questions and sent samples….I never sold one item. It became a waste of my time to even talk with these individuals.

I have never studied the Quicksell closeout merchandise program, however the internet is filled with consumer complaints about this business opportunity. From what I have read I would stay far away. Take a look at The Zaken Corp–Legit or Scam? and www.complaints.com.

I thought it would be time to post about Quicksell as we did get an inquiry from an individual who bought into the Quicksell Business opportunity. This is a small portion of the comment we received last week:

“I’m not sure if this is the right place for this type of request or feedback, but I’m trying to find ways to learn about the liquidation business. My name is [Left Blank] and I bought into one of those internet businesses, that so far, is of course not working out the way they said it would. However With some time and research I have found that there is some money that can be made in this business.”

I responded back to this individual explaining that there is no need to “buy a program” to help you make money selling closeout excess merchandise. I offered a couple of tips to this person as I am always willing to help.

I would like to hear from others who have bought into this Quicksell or Zaken Coporation program…Good or Bad?

Working percentage versus salvage: You are buying salvage merchandise, there is no guarantee that a certain percentage of your pallet or load will be working. Customer returned merchandise can range from working to missing pieces and/or broken. If you have a background in teching or fixing broken electronics this will be helpful and will increase your profit margins with sell through. A word of caution: Most pallets and truckloads advertised on the Internet from Brokers and Liquidators will be assigned a working percentage to further increase your desire to purchase. For example a pallet may be advertised as having 30% damages and the balance being “Open Box” or “Scratch and Dent”. Again, you are buying salvage merchandise and I would never take into consideration a claim made by a Liquidator or Broker when deciding what particular pallet or truckload to purchase.

Selling Restrictions – Always ask about selling restrictions when buying closeout and salvage merchandise. You may have to abide by strict rules when selling salvage merchandise put into place by the original retail store. For example here is a copy of a purchasing agreement which must be strictly adhered to when buying salvage merchandise from Genco (third party contracted liquidator for Sears, Kmart and other large big-box retailers): Genco Selling Restrictions

Pricing Analysis – This is another critical area assuming you can review a manifest before buying. If purchasing from Genco you will have the ability to view a manifest before buying customer returned electronics. I have a sample manifest of a load that was described as 9 pallets of “National Brand Electronics” consisting of 769 items with an original vendor cost of $31,942.77. The purchase price of this load is 19% of the vendor cost or $6,069.13 before freight. Take a look at the manifest to view my pricing analysis for a few items.

Sample Electronics Manifest

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Counterfeiting is defined as the of a product and unauthorized use of another’s trademark (registered brand name, logo, scent, design, etc.). The counterfeit, identical in appearance, gives the impression of being the genuine product from the real manufacturer. Of course a knockoff is only meaningful if the genuine article is well-known and in demand. Therefore, most knockoffs are of luxury goods carrying a well known trademark. They are a deliberate attempt at deceiving consumers into thinking they are buying products made by a reputable manufacturer when they are, in fact, purchasing inferior copies.

The other troublesome area to be aware of is, “Grey Market Goods” which are not generally illegal. Instead, this classification of merchandise is being sold outside of the normal distribution channels by companies which may have no relationship with the producer of the goods. One example of how Grey Market goods might surface would be due to a third party manufacturer who has received an order for lets say 50,000 Polo shirts from a legitimate label, like Ralph Lauren. The manufacturer after completing the order realizes that there is left-over material [purchased by Ralph Lauren] and decides to make another 2,000 (unauthorized) shirts with it to distribute through the Grey Market. It does occur enough to warrant stricter monitoring of the industry overall. This is just one example of how Grey Market goods show up at a very reasonable price.

If you find a wholesale offer for high end labels like Diesel, Rock and Republic & Seven for all Mankind proceed with caution. I have two great educational websites to pass on to you today called, HonestForum.com and Designerjeansguide.com. Both of the websites are an excellent source for distinguishing “Fakes” from “The Real Deal”. Hundreds of pictures and forum posts to educate you the buyer.

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My Silent Team Are you tired of trying to figure out who to listen to when it comes to succeeding on the Internet and eBay? You need to listen to those that have already succeeded themselves!

Learn how, what and where to buy products at true wholesale prices to sell on eBay or your web site. The Wholesale Buying System was written for eBay sellers by a PowerSeller who sells on eBay every day.

Ripoff Report® is a worldwide consumer reporting Web site and publication, by consumers, for consumers, to file and document complaints about companies or individuals. While we encourage and even require authors to only file truthful reports, Ripoff Report does not guarantee that all reports are authentic or accurate. Be an educated consumer. Read what you can and make your decision based upon an examination of all available information.

Unlike the Better Business Bureau, Ripoff Report does not hide reports of “satisfied” complaints. ALL complaints remain public and unedited in order to create a working history on the company or individual in question.

Thinking of buying a pallet or truckload from a closeout company you found on the web? Here is one post I found from a very unhappy pallet buyer:

(Click on the picture to enlarge)

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