Podcast: Play in new window | Download
The holidays are almost here and people will be out shopping. People will also be out looking for ways to make money to buy these gifts. This podcast episode fits both of these categories. People who shop will make returns that creates opportunities for you to make money by reselling that returned merchandise. So let’s look at a website that you can buy those returns from. Liquidation.com
This is a free website you can sign up for and start buying “lots” of returned merchandise. It is an auction type of a website. You bid on “lots”, usually a pallet of returned or scrap merchandise from a bunch of different retail outlets. Some are shelf pulls, customer returns, “no-sale” items or damaged products. They have warehouses all across the United States. I buy from the main one in Las Vegas and a lot of that is from Amazon.com
Its now common practice in retail to make deals with manufacturing reps and dealers to buy new merchandise in bulk and in return for better pricing, the retail merchant agrees to not return any product. So when you return something to a retailer, they either repackage it and put it back on a shelf with a heavy discount or not even deal with it and ship it off to a third party service to sell either outright or for a percentage of the sales.
Bidding, Buying, etc.
You open a free account and tell them who you are, your business name and what you plan to do with what you buy from them. There is a purchasing limit for new accounts that is waived after your first successful buy. Your Liquidation.com log-in is also good on 6 other liquidation websites including two that deal with government surplus (including military).
The video(video link) will show you what the site looks like and the different parts of the Lots. There is a manifest that tells you what is in the lot, the manufacturer’s suggested retail price of all the products (heavily inflated) and the general condition of the products.
You bid by proxy, setting a maximum amount you will pay for the lot. Your bid starts at its current place and increases until you are the highest bidder or you max out on bidding. Much like eBay, you can set up a watchlist and wait until the last minutes of the auction to bid. The auction can be extended if there is bid at the last minutes of the auction. There is a buyers premium that will differ from auction to auction or seller to seller. It’s usually under 10%.
After the sale has been confirmed, there is a short waiting period before the lot is ready to be shipped or to be picked up. You can get a shipping estimate and hire a service straight from the site to ship the purchase to your location.
Read the manifest and do the math to see what similar items are selling for on other sites. Get a feel for what you can buy it for and what you could sell it for.
I don’t do it full-time, so I am selective on what I decide to buy. Usually, I go items I can sell locally on Craigslist or eBay and meet the buyer or local ship to. I also have friends who do flea markets. So the pricing is different. My goal is to double my money. Putting most of the profit back into the next bid.
Don’t ever expect everything to be there. Most times the boxes will be opened and retaped shut. Not all the parts are returned and you won’t know that until you see it and hold it. be ready to swap parts out or go buy new items to get to all to work and be sellable. It’s difficult to sell “as-is” and get a steady stream of buyers and return buyers if they keep getting shorted on the details.
On the flip side, they often throw extra items in the lot that is not on the manifest. Bonus sales for you.
It’s A Business
The thing I see all the time on the web about companies like Liquidation.com is from disgruntled buyer who feels ripped off. Making it sound like they did not know what they were getting into and that such sites are a risk and a gamble. When you read their reviews and get into the meat of it, you find they bid with emotion and not with common business sense. They did not do the homework, research to see what the items would sell for. They saw the lot had an X-Box in it and went for that one item, no matter the cost.
Figure out what you are good at, what you think and know what could sell in your comfort zone. Never be afraid to walk away from a deal or a lot because others are bidding it past the point of profit. Look for the hidden gems in the various lots and watch the expiration times. Many short timed deals will hit if the warehouse gets overloaded and they need to make room quickly for new arrivals. Especially right before and right after a holiday or a big sales event like Black Friday!
My goal is always to at least double my profits and I always did that and more. If you want to really make the big money in this, always reinvest. Take most, if not all the profits and plow it back into bigger and better sales. Get a rhythm going where you have a few bids out as you pick up new merchandise as you push old stuff out to your sources like craigslist, eBay, back onto Amazon and over to flea markets or swap meets.
Know what you are buying and what you can do with it. The salvage merchandise is strictly for the experts. They know they need spare parts to keep on hand or they know people who need the parts to complete a deal. Returns are just that. they were shelf ready and may have even been sold and returned. I have purchased some lots that were just old stock that never saw the sale floor. if you want to do this on a regular basis, you want to get good at having spare parts around like remotes, plugs and connectors.
Pricing is not always about the lowest price. Not all people are bargain hunters or have time to shop around. They see you have what they want and they have the cash. I have sold at retail, below retail and even over retail. Check the market and see what people are willing to pay. The extra time in research pays off!
If you give good deals and have friendly service, people will want to buy from you again. (it’s not all on low pricing) Keep a list of who you sell to or make it a social media drip feed and keep people posted on what you have available or coming and you may soon find yourself needing more stuff to sell. Not a problem to have and easy to fill that pipeline with products from other sources. But that’s all for another podcast!
What are your thoughts or experiences on Liquidation.com??