Here is where I am in this whole thing… I bought into a product locater business opportunity, as a Broker. I ordered the start up kit, as well as the web site, and the whole shebang. I own my own domain, Maine Liquidators.

Over the past few weeks, I have forwarded them MANY very good finds, and all retail packaged, new and in good quantity, as well as arranged for product samples to be sent to this parent company.

Aside from the two week holiday they close down on, I have had no luck getting anything done through them, at least up to this point. I am quickly losing faith in them and the legitimacy of their operation, even before I stumbled upon your very excellent website and bought your book.

I have several very interested customers who have been up very friendly and willing to work with me, and they want to move their inventory fast, and some of it is very large!

I am stuck now, as I simply am not sure what to do next. I am not able to warehouse or buy liquidations myself, so the broker option is what i am most likely to succeed in doing.

I want to see if i can salvage this and make it work for me. Being a broker seems like the best thing for me…and any insights or feedback you can give me would be most appreciated. Thank you very much, and i wish you a happy and profitable new year.

Sincerely….Jim

Here is my response to Jim:

Hello Jim! Thanks for the compliment on our guide. I am sorry to hear you have not had much luck with the Zaken Business opportunity, have you thoroughly read the portion of our guide where I show you exactly how to become a liquidation merchandise broker? You truly do not need to buy a program where you are locating merchandise for a third party, you can locate merchandise and find buyers yourself!

If you will pardon the pun, you can salvage this opportunity you bought into and go out on your own becoming a Broker. It is hard work, but you do not need some special program!

From here out you will need to invest lots of time hunting for merchandise and connecting with buyers. As a broker you will have to dig deep and investigate wholesale merchandise sources daily. You will find merchandise from many sources including manufacturers, distributors, retailers and importers. How do you find this stock? Well….lots of cold calling, internet searching, and in some instances traveling.

Here is what I would do first:

Try to get a refund from this program that you bought into; if that is not possible, I would simply count this as a learning experience and move on.

I would then quickly set up a small website, like a virtual business card, introducing yourself to both potential suppliers and liquidation buyers. You can use your website to explain how you can assist wholesalers, large retailers and manufacturers moving excess stock. Your website can also advertise the current liquidation merchandise you are trying to re-wholesale.

Next Step:

Start collecting virtual inventory…get your stock lined up. You can use many of the liquidators to blind ship for you including Via Trading, AML, Topper, Countryside Closeouts (there are others).

Call on catalog companies (there are thousands) that have stock ready to dump for .05-.10 on the dollar. This can be a goldmine for you especially if you find a niche catalog. I am going to give you one to start with, ok? This company retails small gifts through a school fund raising program called Elf Shelf (http://www.elfshelf.com). Elf Shelf liquidates stock each year that goes unsold; it is dollar store merchandise, but there are some gems to be found. I have purchased thousands of dollars worth of goods from their warehouse. They will even offer terms if you ares a legitimate business……shoot an email to them from their website and let them know you are interested in buying and helping them move closeouts. Yes, tell them you are interested in buying because it really is the truth…you will buy when you find a buyer!

Then consider:

You need buyers right? Well the only way that will happen is by purchasing traffic. You can do this by becoming a member of either Wholesale central, CloseoutCentral or TheIMASD.Com. I would recommend IMASD as this is where I started. If you want to talk about a discounted membership, please send me an email.

Jim, go ahead and ask more questions by email…. I will help you along the way. Looking forward to hearing about your success!

Warehouse One charged me $1,200 for a Rite-Aid pallet! I ‘m still trying to recover from that. When I went to purchase the pallet, they only allowed me to look at the boxes on the top of the pallet. Is that a normal practice? I cant ever do business like that again.

When I got home with the pallet I discovered it was really bad, but I went ahead and sorted, labeled and boxed the products for resale at our local flea market. Now here comes the frustrating part…there was this guy selling a few tables down from me who had clean, sell- able HBA items including Gillette Fusion to Schick Quattro razors!

I’m slowly working through these problem with the philosophy that there is no problem that doesn’t come without a solution. I just have to find the solution. Which leads me to my point, that other guy a the flea market. His product was not full of junk like I received! I am so frustrated because I don’t know where to get product like that from. I asked him a few questions and he told me he gets to hand pick his stuff and that he pays $750 a pallet. Now if only I could hand pick my stuff that would be a start, but all three places I previously mentioned only allow my to look at the boxes at the top of the pallet.

Before answering Jason’s email I asked a few more questions:

Q- Where are you located?
A- Tennessee

Q- How do you intend to resell your liquidation merchandise?

A- I’ve sold around one hundred dollars on ebay and will continue to work on selling more. I also sell at the flea market. Sales were great the first weekend ($400) considering my product was grossly outdated but after that the bottom feel out. I made $150 this past weekend.

Q- How Large is your local flea market:

Our flea market is a well established market in this area and has a volume of around 1000 people a weekend. They are open year around Sat and Sun 8-5, both indoor as well as out door selling.

Jason, thanks for emailing and I appreciate your dedication towards making a living for your family. The liquidation business is tough and I think you can attest based upon your recent experience. I cannot tell you how many pallets and truckloads I have purchased that were either a total loss or required extreme measures to resell. In my situation, back when I started, I knew if I could just find the right source for merchandise…I could become successful. I plugged away spending countless hours online and traveling to visit wholesalers as well as liquidation sources.

There is not a single liquidator out there that will allow you to dig through a pallet prior to purchasing; when I ran our warehouse we had the same policy. Purchasing customer returns and shelf pull can represent a huge risk especially if you are spending limited capital.

I applaud you for talking with that other guy (competitor) at the flea market asking him as many questions as possible. Sometimes investigative work will give way to sources. I know when I have been out and about visiting flea market vendors and closeout retailers, I pay close attention to stock being sold trying to find shipping tags or something that might give away a point of origin. Don’t just stop talking and asking questions; there may be another vendor there at the market who knows this seller. You may be able to prod someone else for his source.

Take a close look at the merchandise he is selling….(1) are there retail price stickers? (2) What store are they from? If you can find the store this merchandise is coming from, sometimes you can visit the actual store within a 100 mile radius of your home and strike up a friendly conversation with a manager there. Ask questions like, “I have always wondered where you guys send the stock that either does not sell or that has been returned by a consumer?”

I cannot tell you how many times I have done this and received answers like: We box this stuff up and it gets sent to either a liquidator or a reverse logistics company out in ______ . Once you have that location you can investigate further. You can try this with any retailer. Some managers will not have a clue, while others may be very knowledgeable and offer worthwhile information to follow-up on.

Jason, I will be very honest and upfront with you: This is not an easy business to be in, you may be better suited to buy products on a wholesale level where you can pick and chose your inventory- No surprises. I am also questioning this flea market and its attendance; I do not think a thousand people in a weekend is enough traffic. Is there a flea market in another neighboring city that might offer more customers?

I know back when I started I spent a great deal of time traveling to pick pallets of merchandise up. I would hook up a U-haul trailer to my Toyota pickup and drive sometimes 8-10 hours in every direction buying pallets. I met a lot of contacts and was able to develop relationships with many liquidators. I think most honest wholesale liquidators will try and steer you In the right direction as far as what to buy based upon how you intend to resell. You may want to change your direction from HBA products to something else. Maybe something unique where you have little or no competition at your local flea market?

The following companies are fairly close to you and I have personally purchased from all three. I, however, had to have items shipped across the country to my location…you are within a days drive to all three. Now just because I have purchased from the following companies please understand that your success could differ from mine. Liquidation merchandise is like a grab bag so to speak, you never know how many bad apples you might receive with a purchase. When I encountered heavy damages or items that I did not think I could resell, often I had to liquidate those items sometimes at my cost (or slightly bellow) just to recoup money for new inventory.

I would start out viewing each website and then call each company to discuss what they have in stock and what they can offer. If you decide to make a trip to visit, tell them you are looking for a supplier ongoing for your business. Ask them if they could somehow offer a discount for a first purchase as you will be traveling far to interview their operation and make a purchase. Never hurts to ask, huh?

1. 685 miles away from you (about 10 hours by car) is a company called Discount Wholesalers. They have a large selection of HBA on their website.

1. 485 miles away from you (about 8 hours by car) is a company called American Merchandise Liquidators; they have a contract with Shopko for general merchandise pallets.

1. 504 Miles away from you (about 7 hours by car) is a company called Countryside Closeouts; they have several liquidation contracts with catalog companies. They have sold what they call an auctioneer pallet for several years now. A pallet will run about $299.00 and can be a mix of merchandise like housewares, kitchenware and small electronics.

Jason, please keep me posted as to your success. I am glad you found our blog and certainly look forward to talking with you again!

Comment & Question: I thought your Guide was great, I found it to be very helpful on how to get started in the Wholesale Liquidation business. I have almost finished all of the things I need in place to start being a liquidation broker. When you started being a broker did it take a long time to build your business?

Answer: Thanks for the compliment, I am glad you found the information helpful! When we got started in the business we kind of fell into the brokering and dropshipping part of our business and I say this because we were not trying to head into that direction. It just happened. Our intent was to sell on eBay and possibly open up a retail store. If you have read some of my other posts about our start back in 2001 / 2002 you will remember that our venture into brokering came about because of a few fraudulent purchases we made.

Both my wife and I thought there might be room for an honest liquidation broker since there were so many out there who were only interested in conducting business in an unethical manor. We started to make some contacts in the industry and were very careful when we selected a company to broker for.

Once we had a few suppliers on our side, we created a website and the orders started coming in. We used eBay as a means for advertising our website and eventually joined TheImasd.com. There were a few other wholesale directories that we used for advertising, all of which our in our guide. We made sure that every order that we processed was monitored from start to finish. We were interested in our customer’s satisfaction and because of this we earned repeat business.

Keep me posted as to your success in starting your own liquidation brokering business; make sure to offer excellent customer service and you will enjoy the success my wife and I have had!

Sales are slow at the major retail outlets and stock that sits too long is being liquidated. This is our chance to purchase overstocks, shelf pulls and customer returns and become creative in our marketing to the hundreds of thousands of people who love to find a bargain.

For a small investment of $500 – $3,000 you can start your “side business” reselling merchandise on Craigslist, through eBay or even at the flea Market.

I grew up in a family of business owners and have always felt that I could make a living without receiving a paycheck. Even though I do not like the idea of having a boss, I am happy in my marriage taking orders from my wife. The orders stop with her; I do not rely on anyone else for my income.

What about you? Are you looking to start some sort of business on the side or maybe full time? Does the thought scare you in any way…are you uncertain about profit margins, taxes or a myriad of other issues? I thought it would be a great time to dig through my personal bookmarks and offer a few websites that just might give you the answers and confidence you are looking for.

The following links are in no special order, but they do have one thing in common, they offer great information for those looking at starting a small or large business. Please understand that no matter how small your venture might be planning and organizing will insure success as your business grows.

Helpful Links to Get your Business Started

Business Liability Insurance - Here are a few scenarios that will prove “protecting the bottom line” is one of the most important issues to consider.

SBA Business Intro Videos - Taking your idea to the next step

SBA Resources – The Small Business Association has numerous resources to get you started on the right foot.

How Stuff Works - Considerations for starting a business.

Small Business Start Up Guide – Page after page of free information for the new business owner. Written by Robert Sullivan

Web Marketing Today – If you are taking your business to the internet you will want to bookmark this site

Small Business Wiki – Wiki’s are the latest rage as everyone joins in to offer and edit information, check this one out!

Product Sourcing Basics – Brief information about five different suppliers you can buy from

Internet Retailer – The first FREE magazine devoted to reporting on the Internet revolution in retailing and today remains the only magazine on the market with this exclusive focus.

Trade Pub – Tons of FREE magazines, white papers and digital downloads for the business to business (B2B) market. We have partnered with this directory to offer our readers industry specific trade information at no charge….Enjoy!

FREE Business Cards- All of my business printing is purchased through Vista Print, which happens to be the internet’s largest full service B2B printing company from business cards to invoices!