How Much Will I Really Get For My Closeouts and Excess Inventory?

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The allure of transforming stagnant inventory into cold, hard cash is undeniable. Closeouts, overstock, discontinued items, and excess inventory ā€“ collectively an importers or distributors purgatory ā€“ hold the promise of financial redemption. But before you embark on this liquidation journey, a crucial question looms: how much can you truly expect to recoup? Every company has too much inventory when sales are slow, products don't sell as expected or from canceled orders. Don't let too much inventory sitting in your warehouse be a reason not to take an active approach to selling off closeouts and excess inventory.

Unfortunately, there's no crystal ball in this game. The answer, like a chameleon, adapts to a kaleidoscope of factors. But fear not, intrepid entrepreneur! Let's delve into the labyrinth of liquidations, excess inventory, closeouts, dead stock, overstock inventory, or whatever you want to call it, and determine your potential way out of your problem inventory.

The Spectrum of Sell-Off Options:

First, understand that your liquidation process and path to selling off old inventory isn't a monolithic monorail. Different options cater to diverse needs and yield varying returns:

  • Wholesale Inventory Liquidators: These bulk closeout buyers offer the quickest way to offload large quantities of excess inventory, but expect significant markdowns (50-70% discounts are common).
  • Discount Retailers: Targeting bargain hunters, they might buy individual items or small batches at lower margins (30-50% discounts). This is not the best way to move large amounts of overstock inventory and closeouts at one time. You may be able to sell off small quantities of slow moving products, but it may not be enough to clear stock from your warehouse and make room for new products.
  • Online Marketplaces: Platforms like eBay and Amazon offer direct access to customers, but come with fees, shipping costs, and fierce competition. Profits can vary greatly but you will get more money for your closeouts and liquidation inventory. Online closeout buyers may be able to offer you the opportunity to keep your closeouts away from your regular distribution channels.
  • Consignment Shops: They take a cut of your final sale price (typically 30-60%), but handle marketing and sales, ideal for high-end or niche items. Just understand, whatever closeouts don't sell, you will have to take the inventory back and store it at your warehouse again.
  • Fire Sales: Slashing prices can clear stock quickly, but expect razor-thin margins and potential brand image damage. Closeout buyers and liquidators are best know for buying at fire sale prices. The good news is they will take the entire inventory in one fell swoop. So if you are shutting down your business, downsizing warehouses or even closing your warehouse, this may be the best way for you to see the fastest results.

Now, let's unveil the the factors that can dramatically alter your selling price:

  • Product Category: Fashion items generally fetch higher prices compared to closeout housewares, with seasonal factors further influencing demand. It may also be easier to sell discontinued pet products or overstock lawn and garden products than it may be getting rid of home accents overstocks or liquidations of toys and sporting goods. Most liquidation companies specialize in certain product categories. So while one closeout buyer may be interested in excess inventory of toys and games, another may only want to buy overstock housewares or discontinued inventory of pet products.
  • Brand Recognition: Established brands command higher prices than unknowns, offering more leverage in negotiations. Name brand closeouts will always have more value than generic closeout products. For example, name brand closeouts of toys means much more than a generic import brand.
  • Item Condition: Pristine products naturally bring in more than those with wear and tear, requiring steeper discounts for damaged goods. So whether you are closing your business and have Amazon products for sale, or you are downsizing warehouses and have to clear stock from your 3PL warehouse, brand new closeouts are the easiest to sell.
  • Inventory Age: The longer an item sits, the less desirable it becomes, necessitating deeper discounts to entice buyers. It is always best to get rid of your closeouts and liquidate inventory before it gets so old that the packaging turns yellow or the products gets outdated. Typically your first loss is your best loss, so once you determine which dead stock you want to get rid of you should move quickly and offer it to inventory liquidators and closeout buyers.
  • Storage Costs: The longer overstock inventory occupies space, the more it eats into your potential profit, pressuring quicker sales at lower prices. Dead stock sitting in the warehouse has hidden costs you may not even think about, including the cost of not having space to bring in new products, the cost of sitting on slow moving products and the cost of interest payments on any outstanding inventory loans.
  • Buyer Motivation: Desperate closeout liquidators offer lower prices than those seeking specific product categories or brands. But in general, inventory liquidators will be able to make offers so you can sell closeouts in bulk and get rid of the entire inventory at one time.
  • Local Market Dynamics: Regional differences in demand and competition can significantly impact selling prices.

So, How Much Can You Really Expect?

With the chameleon's colors revealed, let's paint a more realistic picture:

  • Wholesale Liquidators: Expect 20-50% of your original wholesale cost, depending on factors like product category, brand, and volume. If you are having trouble finding a closeout buyer for your products, try a simple Google search using these terms: closeouts, excess inventory, shutting down business, downsizing warehouse, overstock buyers wanted, looking to sell off excess inventory, closeout websites, closeout brokers, clear stock from warehouse, looking to liquidate inventory, keen to liquidate inventory, going out of business
  • Discount Retailers: 30-60% is the typical range, with higher margins possible for unique or in-demand items. Retail stores may be able to help you with some of your closeout inventory, but if you have a large amount of excess inventory you will need bulk wholesale buyers. These are companies that specialize in buying overstock inventory and liquidating large quantities. There are also different kinds of liquidation companies; some specialize in closeout housewares and overstock home goods, while others only handle excess inventory of pet products and discontinued garden products.
  • Online Marketplaces: Profits can vary wildly, depending on your pricing strategy, fees, competition, and shipping costs. Aim for 50-70% of your original retail price.
  • Consignment Shops: Your share of the final sale price will be 40-70%, depending on the shop's commission and the item's selling time. Any closeouts that do not sell on consignment remain your inventory and you will have to bring the merchandise back to your warehouse.
  • Fire Sales: Discounts start at 50% and can plummet further depending on customer response and urgency to clear stock.

Beyond the Numbers: Strategies for Maximizing Your Loot

Remember, liquidating inventory is a strategic dance, not a blind shuffle. Here are some moves to maximize your profit when selling closeouts, shutting down operations, downsizing your warehouse or going out of business:

  • Bundle and package: Group complementary items to create more appealing and higher-priced offerings.
  • Target the right buyers: Research and negotiate with buyers who specialize in your specific product categories or brands.
  • Leverage online platforms: Utilize e-commerce marketplaces strategically, with optimized listings and targeted marketing.
  • Time your sales: Seasonal trends and holidays can influence demand and prices. Strike while the iron is hot.
  • Get creative with marketing: Eye-catching promotions and discounts can attract buyers and boost sales.
  • Don't be afraid to negotiate: Sharpen your negotiating skills and extract the best possible deals from potential buyers. Closeout buyers are used to negotiating; just because they make an offer to buy your closeouts, this does not mean it's the final offer.

Selling closeouts, overstock, and excess inventory requires a clear-eyed assessment, not wishful thinking. Understand the market forces, identify your ideal closeout buyer, and develop a strategic approach. By carefully navigating the variables and employing smart tactics, you can transform your excess inventory purgatory into a profitable paradise. Remember, the key is to approach overstock liquidations as an opportunity.

Merchandise USA is a closeout buyer in business almost 40 years. We specialize in buying excess inventory, discontinued products, dead stock, unwanted products, overstock merchandise and closeouts. We buy housewares closeouts, slow moving products of lawn and garden products, overstock home goods, excess inventory of toys and sporting goods, etc. If you are shutting down your warehouse or going out of business, we can help you with the liquidation process and explain how to clear stock from you warehouse.