I'm Liquidating Excess Inventory and Overstock. How Much Can I Get?

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Unfortunately, it's impossible to accurately predict the exact amount of money you can expect to get when liquidating unwanted inventory, overstock products, closeouts and canceled orders. Several factors influence the potential amount you can recover, making it a case-by-case scenario. However, this article aims to give you the knowledge to estimate potential earnings and choose the most profitable liquidation strategy for your specific situation. Your specific conditions will play the biggest role in how much you lose when selling excess inventory and liquidation stock.

Understanding the Factors Affecting Liquidation Revenue for closeouts and abandoned inventory vary

so please read on.

Several factors directly impact the amount you can expect from liquidating unwanted inventory or closeout overstock merchandise. Here are some key aspects to consider when offloading old inventory and looking for closeout buyers to take away dead stock.

  • Demand: Products with high demand, even if they are older models or closeouts, are likely to yield a higher return compared to items with low or declining customer interest. The biggest reason companies liquidate excess inventory is because they don't need the merchandise anymore and it's costing too much money because warehouse fees are so high. The older inventory gets, the less value it has so it is always best to liquidate old outdated inventory as soon as possible.
  • Seasonality: Seasonal closeout and overstocked items are best liquidated during the off-season or shortly before the next season when demand might be higher. Liquidating out-of-season items during peak season offers a slightly better chance of recovering a larger portion of the original cost. But sometimes it is better to maximize sales while in season, and liquidated or offload inventory when it is off season and there is no demand for the overstock products in question.
  • Brand Recognition: Well-established brands with loyal customer bases often command higher closeout prices during liquidation compared to less recognized brands. It's always easier to sell name brand closeouts than generic off brand overstock. Consumers today want great deals below regular cost and they also like the name brands. Obviously, name brands don't have closeouts and excess inventory because it is easier for them to sell through at full price. But sometimes, for various reasons, even major brands have to offload excess inventory and get rid of closeouts and dead stock. Sometimes even brand name products experience canceled orders and excess inventory sitting dormant in the warehouse.

2. Condition of the Inventory:

  • New or Like-New: Closeout products in pristine condition, including packaging, naturally fetch higher prices compared to damaged or used items. Closeout buyers in business to buy overstock inventory and resell it to other liquidation companies or excess inventory sellers often only want brand new closeouts. Damaged and returned goods are more challenging to sell and have a limited customer base. But brand new closeouts in original cartons, or just overstock inventory due to overstocked businesses that bought too much and have extra inventory in the warehouse can easily be sold.
  • Functionality: Ensure all products are functional and operational before liquidation. Non-functional items might require significant discounts or alternative disposal methods like recycling. Companies that buy overstock may steer away from goods that either don't work or are missing parts. For example, closeout housewares and closeouts of home accents that could be missing parts might be difficult to offload in the world of overstock buyers and closeout companies. But closeouts of toys, games or overstock lawn and garden products that are easy to work with might be an easy sale.

3. Chosen Liquidation Method:

  • Liquidation Companies: Closeout companies and inventory liquidators typically purchase inventory in bulk at a discounted rate, often ranging from 20% to 70% of the original wholesale cost. The discount percentage depends on factors like the product category, condition, and demand. If you are looking for an excess inventory buyer, you can try a simple Google search using these terms: closeouts, overstock inventory buyers, selling abandoned inventory, where to liquidate overstock products, shutting down entire operation, downsizing and closing warehouse, getting rid of dead stock, closeout websites, closeout brokers, where to find wholesale liquidators, liquidating inventory, etc.
  • Online Liquidation Marketplaces: Selling through dedicated online liquidation platforms can offer a wider customer reach, potentially leading to higher sales and recovering a larger portion of the cost. However, these platforms often charge listing fees and commissions, impacting your final profit. In these cases you may find a closeout buyer for inventory but will have to pay commission in order to get information about the closeout buyers or inventory liquidators. If you find overstock buyers through a service like this, it may still be worth it if you are liquidating inventory for enough money. But in some cases abandoned inventory for sale does not bring much cash, and it may not be worth it. Closeout websites that allow you to list liquidation lots for sale without fees are the best way to go.
  • Physical Clearance Sales: Organizing clearance events within your store or a designated location can attract bargain hunters and potentially clear out large quantities of unwanted inventory and closeouts. However, this method requires significant upfront investment in marketing and logistics. It is often in the form of having an inventory liquidation at a tent sale, in a discount store or even a large warehouse sale liquidating stock to make space for new merchandise arriving. If you need to sell unwanted inventory because you are paying too much in storage and you think offloading dead stock will reduce costs, then a physical sale like this may be the way to go.

4. Negotiation Skills:

Your negotiation skills can significantly impact the final price you receive, particularly when dealing with liquidation companies and professional inventory liquidators. Research current market value for similar items and be prepared to negotiate the purchase price based on the factors mentioned above. When you sell your overstock and excess inventory to inventory liquidators, expect your products to be sold as surplus inventory in off price discount stores, thrift stores, variety outlets or closeout distributors. These are all businesses that sell overstock and unwanted inventory that distributors were unable to move to their regular customers because the items were either discontinued or overstock, or perhaps there was a package change or simply too much inventory sitting in the warehouse costing too much money. But whatever the reason, excess inventory buyers will find a home for your dead stock and discontinued products, so you can get it out of your warehouse and stop paying good money to store bad inventory.

Estimating Liquidation Value

While an exact prediction is impossible, understanding the factors influencing inventory liquidation value allows for rough estimates based on your specific situation. Here are some approaches:

1. Research Similar Listings:

  • Search online marketplaces like eBay or liquidation and closeout websites that list similar products in comparable condition. Many companies are choosing to liquidate inventory and shut down their entire operations. Others are downsizing warehouses due to the high cost of warehousing and storing products.. Shipping costs are up, hiring is nearly impossible, inventory levels are difficult to maintain, and running a successful closeout business in general is difficult. Companies are choosing to contact liquidation buyers and overstock inventory buyers to liquidate excess inventory, They can make the same or even more money on a smaller scale with fewer headaches. Navigating through today’s business environment is a challenge, to say the least. And in some cases it just makes more sense to sell surplus inventory, scale back, do less and be happier.
  • Analyze the selling price of these items to gain an understanding of the potential market value for your inventory. Consult with Liquidation Companies so you know what to expect when having an inventory liquidation sale and clearing stock from your warehouse. This will also help you gauge how much money you will get for closeouts of housewares, overstock lawn and garden products, closeout pet products, overstock inventory of home accessories, discontinued toys inventory, etc.
  • Contact liquidation companies and request quotes based on a detailed description of your inventory, including:
  • Product category (closeouts come in all categories so it is important to disclose if you have closeout pet products, closeout hardware inventory, excess stock of children's toys, overstock lawn and garden inventory, abandoned inventory of home goods, or canceled orders on stationery and arts and crafts.
  • Brand: Brand name closeouts are generally easier to sell and more closeout buyers will be interested in paying a higher price. Keep in mind, generic imports being liquidated or offloaded may not be anything special, but name brand closeouts are in high demand.
  • Condition (new, used, damaged). When offloading overstock merchandise, try to offer closeout buyers brand new goods. Damaged and used inventory may have to be donated or given away free. Companies that specialize in buying overstock inventory and liquidation merchandise are generally reselling into the discount market, so they are only interested in closeouts of new products.
  • Quantity. Some closeout buyers can work with small quantities of overstock merchandise. But others that are selling to large chain stores may only buy closeouts in very large volume. Since there are so many different size lots of closeout inventory available, there should be closeout buyers to fit all needs.
  • Estimated retail price. Suggested retail may not be the best gauge for what to expect to get for your excess stock, overstocked inventory and closeouts. More often, closeout buyers will work from your original landed cost, and pay a percentage for bulk liquidation buys. Liquidating excess inventory can be easy, as long as you work with reputable closeout companies and established inventory liquidators.
  • Be prepared to receive a bulk purchase offer at a discounted rate, typically within the range mentioned earlier (20% - 70% of wholesale cost). If you are trying to recover your costs, this likely will never happen. Overstock inventory buyers cannot make money by reimbursing you for your cost. However, the good ones will make it clear from the beginning that, when making bulk inventory liquidation purchases, you can expect to receive a portion of your original cost. As an example, if you have a large excess inventory of closeout housewares that cost you $50,000, you might expect to recover 25% to 30% of that cost. Closeouts of housewares are and overstock inventory of pots, pans, flatware, etc have value. But if you are liquidating inventory of apparel, it will be more difficult for you to recover a high percentage of cost. Inventory liquidators that do this for a living are looking to make large excess inventory buyouts where they can take your entire inventory in one fell swoop.

3. Factor in Additional Costs:

  • Regardless of the chosen liquidation method or process of selling closeouts, remember to factor in additional costs beyond the sale price:
  • Liquidation fees: These may include listing fees on online platforms or service charges by liquidation companies. Some closeout brokers charge a commission to connect buyers and sellers, some closeout websites take a percentage of the sale, and some closeout brokers will buy your excess inventory in bulk, then resell it to their customers.
  • Shipping costs: If using online marketplaces, consider the cost of shipping bulky or heavy items.
  • Marketing costs: If organizing a physical clearance sale, factor in marketing and promotional expenses. Closeout sales that have to be setup and organized by a third party can be costly.

Beyond Profit: Additional Considerations

While maximizing your financial return through having an inventory liquidation sale is desirable, it's important to consider other factors beyond just the immediate monetary gain:

  • Environmental Impact: Explore environmentally responsible disposal alternatives like recycling, upcycling, or donating to charities for unwanted inventory, especially for items in good condition. Sometimes getting rid of dead stock and aged inventory can be challenging, to say the least. Not all closeout buyers are interested in buying all overstock products. Some excess merchandise gets left behind and for unknown reasons just cannot be sold. These are the leftover inventory that may have to be given away free or donated as surplus inventory and excess products that didn't sell.

Liquidating unwanted inventory can be a strategic approach to reclaiming valuable warehouse space and generating some additional revenue. However, accurately predicting the exact amount of money you can expect is challenging due to the various influencing factors. By understanding these factors, researching market conditions, and choosing the most suitable liquidation method, you can maximize your returns for excess stock, closeouts, abandoned inventory and discontinued or canceled products.

Merchandise USA can sells liquidation stock of all kinds including closeout housewares, closeout pet products, overstock inventory of home accessories and much more. We buy closeouts of lawn and garden inventory, excess inventory of all kinds of hardware and tools, and inventory closeouts of any consumer merchandise that did not sell. If you are going out of business, shutting down operations, downsizing warehouses or closing your warehouse, we can help you with the closeout process. Inventory liquidation can be easy with the right partner. Sell excess inventory quickly with the help of a professional inventory liquidator.