Which Wholesale Liquidation Lots Should I Go For?

Nothing can be as tempting as wholesale liquidation lots, especially since they allow liquidation businesses to buy a lot of merchandise for a significantly lower price. However, don’t be fooled by the numerous discounts attached to them. They may not necessarily offer much potential, which means that you’d be stuck with a disaster that won’t leave your storage any time soon. You may even incur losses by offering more than one at a price that doesn’t even cover the cost you had spent.

So, if you want to be smart while selecting wholesale liquidation lots, consider the following tips every time you shop for them.

Always Know the Type of Lot You’re Buying

As you probably know already, liquidation lots are categorized into different types such as closeouts, surplus and refurbished. Knowing which of these categories the one you want to buy belongs to will ensure that you make a good decision. For example, by choosing to buy a surplus lot, you may be putting yourself at the risk of being stuck with a disaster lot that isn’t highly in demand. Why else would the wholesale seller or retailer be auctioning it off?

However, while inquiring about the type of lot you’re interested in, find out about its origin too. Now you may be wondering what that has to do with anything, but this little factor can make or break a deal. For example, if you’re based in Florida and are looking at a surplus of summer essentials auctioned in New York, that lot will be more profitable for you since it’s always sunny where you are and your clientele will forever demand this merchandise.

Do a Little Research to Assess the Demand of Your Buyers

There are hundreds of wholesale liquidation lots available via online or physical auctions, but you need to make sure that the merchandise you buy doesn’t sit idly in your storage space. Therefore, find out about which items are most needed by your buyers. For example, buying Sega games while Sony games are more in demand these days won’t do you any good.

However, you can always plan for the future if you have facts and figures that prove the comeback of your merchandise. For instance, there’s a very good chance that 80’s fashion will be coming back in style by the end of 2013. Therefore, you will be doing yourself and your clients a favor by stocking on these.

Who You Buy From Can Determine the Success of Your Lots

One of the secrets of getting profitable wholesale liquidation lots is checking who’s selling them. If you’re buying your lots via the web, you may want to check whether the seller’s customer reviews are good. For example, while eBay recommends Liquidation.com, it tells its clientele to be cautious while dealing with the website.

Even if you’re buying from a physical store or via an off-line auction, your smartphone will allow you to check the web for reviews and decide whether or not the buyer is reliable enough to ensure your profits rather than losses.

Crunch the Numbers Before Paying a Single Dime

Some wholesale liquidation lots can be like diamonds in the rough, but that’s not always the case. If you’re considering a lot that was returned or pulled off the shelf due to a defect, you need to calculate whether or not you can fix the issue and still get a handsome profit. If you can’t, it would be better if you forgo this lot altogether. Similarly, if one of the wholesale lots you like comes with too many additional costs that reduce your profit margin, stop thinking about it altogether.

Consider the Time You Need to Invest in a Lot

Costs aside, you need to keep tabs on the amount of time the merchandise will be delivered to you, fixed if necessary, and then sold off to your clients. If either the delivery or fixing period takes too much time, your competitors are bound to take the lead and your market will be saturated even before you step into it with your offerings. Therefore, consider the amount of time you’ll need to invest in a lot to deem it profitable or a recipe for disaster.

Play it Safe Whenever You Can

The beauty of liquidation lots lies in the fact that there are hundreds of options for you to choose from. However, while some wholesale liquidation lots can be a risky investment, some can have better potential because they’re safe. For example, you can go for clothing and accessories lots since these are always in demand.

You can also play it safe by avoiding trends and perishables since both are bound to make your money go to waste on the long run. Yet you can try going for accessories of trendy gadgets like iPhone covers or Samsung Galaxy S3 bling since teenagers and adults alike always want unique ones.

Beat off the Competition

If your competitors have been in the business years before you and have a strong buyer base, consider taking a look at their offerings and finding out how well they’re selling. This will give you an idea of what people are demanding so that you can cater to their needs once your competition’s stock is finished. However, make sure that you aren’t caught or else your competitor may send you on a wild goose chase and nab your own customers in the process.

Ensuring the most value for money and the highest profit margin while shopping for wholesale liquidation lots is never easy. Even the most experienced are bound to make a rash decision because they didn’t think things through like they should. However, in addition to whatever experience you had gained in the past, using the tips whenever you can allow you to achieve your goals.

You can even take them for a test drive and implement them without spending a penny. This way you’ll never have to worry about your hard earned cash ever going to waste and you’ll know just what you need to make it as a wholesale liquidation trader.

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