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Understanding the Closeout Liquidation Business

Understanding the Liquidations Merchandise Business Allows you to make significant profits if done wisely.

The Wholesale Liquidation Merchandise Business can look very tempting for those individuals eager to make extra money on the side or for stores looking for a new source to drive in customers. Understanding it makes for a wiser investment. First off, when purchasing liquidation merchandise, understand that this merchandise was either once on a shelf in a department store that no one cared for or didn't sell well, can possible have been purchased and returned after being used, or can even be something returned because the item was defective. Many Department Stores design their Liquidation Offers into different categories.

The most important question to ask the Liquidation Company when inquiring is whether the merchandise offered has been picked through, or is it being shipped directly from the Department Store's Distribution Center. The Department Stores usually create their liquidations with a nice assortment with the idea in mind that a customer will eventually need to resell these to make a profit. The create these Liquidations by the Pallets which usually fill a truckload. Pallets will typically be a 48"x40"x48"H crate filled with merchandise. The pallets will usually have a variety of a specific category such as clothing, shoes, tools, and sometimes just mixed with all different categories called "General Merchandise". The best option is to order merchandise that ships directly from the Department Store straight to you with no middle man or third party warehouse. That is where you will run the risk of being burned, or possible receiving picked through pallets so the Liquidator can make a quick buck. The Liquidations offered usually by brokers who contract with major well known Department Stores and Websites such as Amazon.com, Home Depot, Kmart, Sears, etc. Usually you can ask to view a manifest ( a list of contents of a particular offer). Most often times a manifest is only available for truckload offers and usually previous sample manifests are sent to give customers an idea of what to expect in their own shipment. Almost every liquidation company receives payment by bank wire transfer because that is usually how the Department Stores get paid. Always make sure you are dealing with a legitimate US based company before wiring any money.

Pricing is usually calculated bases on a percentage of a Wholesale or Retail Value given to a particular Pallet or Truckload by the Department Store. You will always get the most for your money on Truckloads of merchandise.

To give you an idea of what you get for your money; take a Truckload of Home Depot General Merchandise for example: These Truckloads usually have an Original Value of $40,000. The Truckloads usually sell for $5400. That is 13.5% on the dollar. Which means that even if you sell half of the load ($20,000 worth) at half the original value ($10,000) you have almost doubled your money! And that is the worst case scenario. Most customers sell atleast 70-75% of a load. The potential profit is amazing. Always do your due diligence. Ask Questions! Be Smart. Have Reasonable Expectations. And Make Money!

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