Reselling Insurance Salvaged Merchandise

Have you considered purchasing insurance salvage merchandise? This is inventory that has been involved in some type of insurance claim where a policy holder has been indemnified for a loss. Probably the most recognizable type of insurance salvage would be that of an automobile loss, where a car is involved in an auto accident and the repair cost ends up being more than the vehicles worth. In this situation insurance companies will deem the vehicle a “total loss” and offer the insured a monetary settlement based upon the value of the car just prior to the accident. The insurance company will then take title of said vehicle and, often, dispose of through an auctioneer in an attempt to recover as much money as possible to offset the original claim settlement.

What happens when large warehouses filled with hundreds of thousands of dollars worth of inventory catch fire? If properly insured the company that owns the inventory will be indemnified for the loss. Once a settlement is reached for the insured, the damaged inventory will become property of the insurance company that just wrote a large claim check.

Not all claims result in a total loss…sometimes just a portion of insured inventory is deemed a total loss.

The remaining “smoke damaged” merchandise can often be salvaged (cleaned, repaired, repackaged, etc) by somebody. The insurance company, who now retains title to said merchandise, will often utilize a third party to auction off the assets in an attempt to offset any claim payment made. Here are a few examples of claims that could result in an insurance payout and subsequent sale of salvaged consumer inventory:

1. Partial fire losses
2. Smoke damage from an adjacent fire (building owned by someone else)
3. Water damage that affects a portion of merchandise in a warehouse.
4. Merchandise involved in a trucking accident during transit
5. Merchandise that is labeled incorrectly (error found after packaging 50,000 units)
6. Theft Claims (merchandise stolen, claim paid and then merchandise recovered months later)

Purchasing insurance salvaged merchandise might be a viable option for your business. You may need to take a little risk, but if you are buying liquidated customer returns you already understand there could be a portion of your purchase that cannot be resold. In addition you there might be some work involved with cleaning, repairing or repackaging items for resell.

One of the best auction websites for insurance salvaged merchandise is Salvagesale.com. Most of the assets auctioned off tend to be larger industrial equipment pieces, but there are at least 1 or 2 auctions per week of retail inventory (consumer merchandise). Make sure to bookmark this website and check back often…you just might find a goldmine!