• “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.

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.

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.

First of all, consider the various flea markets available to you. Depending on where you are geographically, you may have access to specialized flea market events as well as more general flea markets. It can oftentimes be much more profitable to sell at specialty markets, rather than general markets where anything goes. The types of specialized flea markets that are available include: arts and crafts, antiques, clothing and accessories and more. So if you’re located in an area where flea markets abound, take the time to do research and see if you can find some that are dedicated to the kind of products you’re trying to sell.

An easy way to find flea markets in your area is to visit greatfleamarket.com.

On your mark, get set, go… Having a booth in close proximity to the entrance can help you increase sales since you’ll get more exposure than more remote booths, especially if it is a large market. If buyers need to walk past your booth (well, hopefully they’ll actually stop at it) on both their way in and way out, you will definitely improve your chances for sales relative to other booths that a buyer may only see once and potentially forget about. Furthermore, be ready to sell as soon as the doors open – it is said that the first hour and the last hour of flea markets are when vendors should expect to make the bulk of their earnings.

Keep your table full! If your table starts to look a little sparse, it will turn buyers off as nobody wants to feel like their buying picked over merchandise. Having your merchandise organized beforehand will allow you to easily replenish the products as they begin to sell. You may not need to have all of it out at one time, but it is a good idea to keep your booth stocked throughout the day. An empty booth and sparse tables will turn potential buyers away. A colorful, well-stocked, professional looking table is much more appealing to buyers than one which looks like its on its last legs.

Leave some space! Have you ever been to a flea market where you were bumped and squeezed against the table as foot traffic tried to get by? If people are uncomfortable when they are browsing they will be less likely to stick around and buy, so make sure that your potential customers have room to comfortably view the merchandise without being run over by other customers.

Plan an adequate supply of money as well, so start the day with plenty of change! Don’t rely on change from your early sales to make enough change for later sales, as that usually doesn’t work out. Ensure that you have at least a few hundred in twenties, tens fives and so on, as well as at least ten dollars in the various coins. When you do it this way, you will be confident in your ability to make change for any transaction.

All merchandise needs to display a clear price. While many folks who shop at flea markets will prefer to haggle, they would also like to know the “starting point”. If you fail to tag certain items with a price, you may find that you lose sales as it will scare off some buyers who speculate the price is higher than it actually is. Tags and pricing signs should look new and sharp as reused or less-than-presentable tags will make the products appear of similarly substandard quality.

Offer a deal – “I’ll give that to you at 10 percent off” “Buy two and you can have thirty percent off”. Leave wiggle room so that you can make such statements – this forces the prospective buyer to communicate with you (whether it’s a ‘yes’, ‘no’ or ‘maybe’ response) and can help turn casual browsers into actual customers.

Check out the competition – If you’re selling t-shirts for ten dollars, but another vendor is selling similar t-shirts for half that, who do you think is going to get the sales? Make sure to take time to scope out the competition (or have a helper do it) to make sure you’re not pricing yourself out of the market.

Lastly, don’t forget the bags. Hopefully you’ll start with lots at the beginning of the day and very few at the end!

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.

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!