It may be that a product is not selling well, or that the importer is looking for closeout brokers as the product has run its course. It is also possible for importers and wholesalers to have overstock closeouts if sales did not meet expectations or the company is shutting down 3PL warehouse operations. It doesn’t mean that there is anything wrong with the product but businesses are always bringing in new items. In the promotional world of closeouts it doesn’t mean that there is anything wrong or that the merchandise is damaged, the supplier just needs to make room in the warehouse for new merchandise. If items are not kept fresh and moving along the item becomes shelf worn as everyone likes to see new products. Closeout websites can be helpful when getting rid of old inventory, however, selling directly to closeout brokers or liquidation buyers may be faster and easier.
Rather than storing old merchandise until the following year, almost every U.S. business also has post-holiday clearance sales now, sometimes starting even before the holiday (especially Christmas and Halloween). Consumers respond well to discounted closeouts from companies that have too much inventoryand want to get rid of merchandise. Early discounts are often around 25%, but range from zero to as much as 50%, particularly if the "regular" prices were deliberately inflated as some stores do. 50% is common just after the holiday, often followed by 75%, and sometimes even 90%, at which point there is very little if anything left to choose from. Closeout merchandise is often sold for pennies on the dollar to wholesale liquidators so they can pass along the deals to their liquidation buyers. Liquidation stock is always available, but even more so after the holidays. Often during after-Christmas clearance sales, they let people know that this is their chance to buy everything they didn't get for Christmas, or as the phrase goes, "everything Santa Claus forgot." Particularly in Canada, “Boxing Day sales” draw large crowds of shoppers seeking after-Christmas closeout deals.
Clearance sales typically occur on clearance racks in brick-and-mortar stores. At the end of the year companies may be shutting down 3PL operations or moving 3PL warehouses, so they want to get rid of old inventory rather than move it. Some companies that were struggling go out of business, and this creates closeout merchandise and situations where they have to liquidate excess inventory. Closeout brokers are the middlemen who source closeouts and sell them to the discounters. Stores typically place merchandise on a clearance rack and mark the price down until someone purchases the item. This clearance sale can be further enhanced by using banners and signs, both on the interior and exterior of the store. This closeout process has been replicated on the internet. The defunct drop.com was the first clearance website to mimic a retail store clearance rack by allowing sellers to automatically mark down their items including all kinds of closeouts, overstock and surplus merchandise.
Merchandise USA is a wholesale closeout buyer in business 37 years. We specialize in helping companies reduce excess inventory and get rid of old merchandise and discontinued products. With the cost today of 3PL warehousing it is important to sell excess inventory quickly.