I spoke of advantages yesterday in selling closeout and surplus merchandise so it is only fair to to spend a little time talking about one distinct disadvantage. First and foremost sourcing closeout merchandise can be difficult. Unlike traditional wholesale where you might have 3-4 major suppliers ongoing, closeout merchandise including shelf pulls, customer returns and overstock requires a network of suppliers to keep your business up and running.

You might find a great pallet or truckload of furniture at a great price and realize a tremendous profit from sell through, however you may not be able to get another pallet or load as the first. Closeout merchandise is always on short supply and re-ordering a particular load is impossible as merchandise is continuously rotating. I speak from experience as I remember all to well buying 12 pallets of shelf pull and customer returns and realizing that two of the pallets were filled with shelf pull leather jackets. I literally made a killing with that load.

The way I always have looked at it is simple…If you average out all purchases you should have a fairly good sense of marketability and profit margins. My two pallet load of leather jackets more than made up for a few loads I bought that turned out to be junk.

Do you have the stamina required to work this business? It takes creativity in marketing and sourcing merchandise continuously. I believe the challenge is rewarding. What is your experience? I would love to hear from our faithful blog readers….What do you feel is the biggest challenge in buying wholesale closeout merchandise?