Making Money with Closeouts at Flea Markets

Over the last several years the flea market and swap meets have become as American as apple pie. According to a recent issue of Swap Meet magazine, over 600 such functions are being held on a regular basis. Most of these are weekend affairs, but more and more are operating every day of the week.

The biggest flea market of them all is the monthly affair held on the grounds of the Pasadena Rose Bowl. Over 40,000 people attend this function, with over 2000 “dealers” selling their wares. Another giant of the circuit is the one held each week in San Jose – the famous San Jose Flea Market. It isn’t unusual for 25,000-30,000 people to visit this great function each and every day, rain or shine. It is so popular and profitable for the “dealers” that nearly 50% of the spaces are rented on a permanent basis. At times, there is a one or two year waiting list to get a permanent space.

If you are unsure of local markets close to you, check out the Flea Market Guide

What types of liquidation items can be sold at Flea Markets? Any and all. Decide which category interests you and then find a source for inventory. Here are a few Liquidation merchandise Categories and definitions:

Closeouts - Considered to be excess merchandise from a previous season’s production. changes in color, design, and fabric or missed deliveries are all possible causes. Closeouts by definition should all be first quality. Name-brand companies are left with billions of dollars in excess merchandise or inventory each year and are forced to sell their excess for a number of reasons: Items must be removed from shelves to make room for newer models; a change in financial circumstances or strategy may result in canceled orders; manufacturers may be downsizing or moving facilities; companies may need to reduce inventories for accounting reasons. As a result, the companies are forced to sell this first-quality inventory quickly and below their normal cost.

Customer Returned- Merchandise that has been purchased at a retail level and then returned to the original store for various reasons. Some returns are defective, broken or simply returned for no apparent reason at all. A consumer might return merchandise because it was bought in haste or by impulse. In this scenario if the original packaging is not intact or missing a component the retailer will deem it Salvaged. Defective or broken merchandise is a tricky area, often products can be repaired if you have the skill required

Stock Lot- Term used to describe multiples of the same item. Example: a Stock lot of apparel would be one garment in various sizes(Same style).

Shelf Pulls- Merchandise that has been placed for sale in a retail environment, but not sold for a variety of reasons. Often large retailers target a particular product for a certain season…once the season is over the merchandise must be cleared out to make room for next season’s/year’s product. Floor space is like gold in the retail business, and few stores can afford to have merchandise stocked on the shelf when the “next big thing” has just been released and ready for sale.

Overstock / Overrun - Merchandise Overruns are over production from specific cuttings or orders and are generally the result of the order not matching the amount of material needed

Discontinued Merchandise – When manufacturers come out with new models, old models become out-of-date and no longer desirable to sell. Discontinued merchandise can still be very valuable and useful (and in the collectibles industry highly desirable!), however is often sold to liquidators and surplus dealers at pennies on the dollar.

Open Box/Floor Models – This also includes items with box damage. Often items need to be removed from their box to be used as displays at a retail store (vacuums, small appliances, toys, just about anything). The items can range from brand new, to slightly used (due to use in demonstrations), but is almost always in good, usable condition.

Salvage Merchandise – Sometimes a broad term used as a synonym for surplus or liquidation items. Whenever you are purchasing items categorized as “salvage”, always ask about the source of the merchandise. Often merchandise that has been picked through for the sellable items, leaving only parts and unrepairable merchandise. Always ask your seller to make sure whether you are getting the former or the latter version of “salvage”!

Anyone of the above categories of Closeout / Liquidation Merchandise will sell very well at your venue. Try ordering a single pallet of merchandise to “Test the Waters” before investing.

Take the time to visit your local markets and see what other vendors are selling and how they are pricing merchandise.

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