Amazon announced Jeff Bezos is stepping down as CEO almost 27 years after he founded the company to sell books to customers over dial-up modems. The world has changed for closeout brokers and closeout distributors since Amazon started in business. The product mix has dramatically changed, as well as how all of today's products come packaged. Many times now in a liquidation sale of “ecommerce” goods we are unable to use it because of the packaging. Discontinued stock is much more difficult to sell than it used to be because most items do not come in nice shiny retail packaging.
Amazon wasn’t the first bookstore to sell online, but it wanted to be “Earth’s biggest.” When it first launched, a bell would ring in the company’s Seattle headquarters every time an order was placed. Within weeks, the bell was ringing so frequently employees had to turn it off. As Amazon grew, there were more and more opportunities for closeout buyers and overstock buyers to find more goods. The only problem is most of these goods were not packaged for retail, making them difficult to sell. Overstock buyers and closeout brokers generally like retail packaging for brick and mortar. When closeout distributors are forced to work with brown box packaging or no UPC codes, they are limited in theres of where they can sell discontinued stock.
But Bezos – who will remain at the company – set his sights on making it an “everything store.” After achieving dominance in retail, the company would go on to become a sprawling and powerful global conglomerate in numerous lines of business. Today, Amazon is the third-most valuable U.S. company – behind Apple and Microsoft – with a market capitalization of around US$1.7 trillion, greater than the gross domestic product of all but a dozen or so countries. Many Amazon sellers have too much inventory with excessive long term storage fees so they try to liquidate as much inventory as possible. They will often have a liquidation sale for any slow moving inventory sitting in the warehouse.
Amazon – named after the world’s largest river – continually took shopping convenience to newer levels. Before Amazon’s founding on July 5, 1994, shoppers had to travel to stores to discover and buy things. Shopping used to be hard work – wandering down multiple aisles in search of a desired item, dealing with crying and nagging kids, and waiting in long checkout lines. Today, stores try to reach out to shoppers anywhere, anytime and through multiple channels and devices. This is similar to the way closeout websites reach out to their customers with overstock inventory and closeout merchandise. Inventory liquidators would rather get rid of inventory cheap than have it sit in an old warehouse filled with slow moving inventory. They may have flash sales to get rid of inventory, or Amazon liquidations due to high long terms storage costs. In any case, the liquidation process is the same.
After first experiencing two-day free shipping from Amazon’s Prime membership program, shoppers started expecting no less from every online retailer. An estimated 142 million shoppers in the U.S. have Amazon Prime. The company made shopping more convenient through features like one-click ordering; personalized recommendations; package pickup at Amazon hubs and lockers; ordering products with the single touch of a Dash button; and in-home delivery with Amazon Key. There are a lot more liquidation sales on the market today than before Amazon, so there are more liquidation buyers, liquidation companies and overstock inventory buyers. Discontinued stock will always be a problem for companies, but online sellers and closeout websites have an advantage when it comes to getting rid of too much inventory.
Shoppers can also search for and order items through a simple voice command to an Echo or by clicking and Instagram or Pinterest image. Amazon even has a cashier-less “Go” store in Seattle.
Amazon has also been a factor in the rising closures of brick-and-mortar stores that can’t keep pace with the changes in retail. Even before the pandemic, stores were closing at a phenomenal rate, with analysts predicting a coming “retail apocalypse.” Amazon benefited enormously last year as much of the U.S. went into lock down and more consumers preferred ordering goods online rather than risking their health by going to physical stores. Closeout websites and closeout brokers also did well as consumer demand went through the roof for overstock home decor, closeout pet products and discontinued sporting goods.
Amazon’s impact extends to other industries, including smart consumer devices like Alexa, cloud services like Amazon Web Services and technology products like drones. Such is Amazon’s impact that industry players and observers use the term “Amazoned” to describe their business model and operations being disrupted by Amazon.
Today, Amazon is the second-largest U.S.-based publicly listed employer and the fifth biggest in the world. It employs 1.2 million people, having hired 427,000 during the pandemic. No wonder Amazon created such a buzz in 2018 when it held a competition to select a location for its second headquarters. It eventually picked Arlington, Virginia. Amazon’s work culture is intense. It has a reputation as a cutthroat environment with a high employee burnout rate. It is automating as many jobs as possible, mostly in warehousing. The closeout process is almost entirely automated, and Amazon FBA removal orders can be filled with the simple press of a button. This is a great way to return closeout inventory to your own warehouse or a 3PL warehouse selling closeouts and overstock inventory. There are 3PL operations opening across the country to handle nothing but excess inventory, closeouts, obsolete stock and shipments arrived late from overseas due to the supply chain disruption.
Amazon is testing anticipatory shipping, a practice in which it anticipates what shoppers need and mails the items before shoppers order them. Shoppers can keep the items they like and return those they don’t want at no charge. It is also betting on cashier-free stores and AI-powered home robots. Amazon’s future success will depend on how the incoming CEO – current head of cloud computing Andy Jassy – navigates these new technologies while pushing the company into more industries, such as health care and financial services.
Before 1994, shoppers had to travel to stores to discover and buy things. Shopping used to be hard work – wandering down multiple aisles in search of a desired item, dealing with crying and nagging kids, and waiting in long checkout lines. This is actually what makes many closeout operations successful. Consumers really like the Treasure Hunt mentality of digging for bargains and off priced goods. They love the challenge of looking for deals from companies that buy in bulk or inventory liquidators. Today, stores try to reach out to shoppers anywhere, anytime and through multiple channels and devices.
Amazon has embedded itself in our lives and in our homes, unlike any other retailer before; Alexa seamlessly funnels purchases through to Amazon’s platform. You don’t need a store or screen to go shopping, because you can be in your kitchen, asking Alexa to add things to your list. In the future, consumers will be able to completely opt out of the transaction. We’ll never have to think about buying bleach and toilet paper and toothpaste—all the non-emotive boring things that we need but don’t really want to think about buying. In order to liquidate Amazon FBA inventory, the seller must first find a closeout buyer willing to accept delivery of these goods. Then they can get out of Amazon FBA warehouse which is likely charges very high long term storage fees.
For centuries, shopping was a social, in-person affair. Dating back to 800 B.C. in ancient Greece, the city center in Agora was buzzing with merchants selling their wares. People visited not only to shop but to mingle with one another, philosophize and talk politics. Fast forward to 2021, and shopping can be done online, in total isolation and with no conversation. Amazon didn’t single handedly spearhead this evolution in shopping (eBay was just as important an early pioneer in e-commerce) — but it is hastening the rise of online shopping and changing consumer behavior at a lightning-fast pace. There is an entire population of shoppers who still prefer brick and mortar buying. These closeout buyers want the shopping experience of liquidating excess inventory and discontinued products.
Merchandise USA is an excellent account in business more than 37 years. We specialize in buying overstock inventory of toys, housewares, home accessories, lawn and garden closeouts and more. We buy from 3PL's shutting down and businesses closing or liquidating all inventory.