When businesses need to unload merchandise to make room for new products, they typically offer something called factory closeouts. Seasonal goods, store closing merchandise, old products replaced by newer goods and returns are all typical examples of factory closeouts. Wholesale liquidators are the same as excess inventory buyers or overstock buyers These companies step in to help businesses get rid of too much inventory.
Closeouts are products that are sold below original wholesale cost. A perfect example of a closeout product that is offered as a factory closeout is bathing suits. When summer ends, retailers deeply discount bathing suits at the end of the season as a way to sell their excess inventory and get rid of extra merchandise. Factory closeouts tend to be a win-win for all parties. Businesses make more money by selling their excess merchandise quickly to overstock buyers, and customers win by getting access to deeply discounted items. The best part of factory closeouts is that they can be of high quality, branded items that are perfect for resale. And they can typically be purchased for 10 cents on the dollar.
At these prices, businesses can resell factory closeouts for significant profits. However, if not purchased carefully, factory closeout merchandise can be combined with low quality, damaged goods. Therefore, it is essential that you take the time to find the right factory closeout dealer to purchase the best possible products. To guide you through this tricky terrain, below a simple step-by-step plan to help you get started and to help you understand the closeout process used by closeout brokers, excess inventory buyers, and overstock buyers who specialize in liquidations and shutting down 3PL warehouses.
Buying factory closeout merchandise can be an incredibly lucrative opportunity if done right. Therefore, take the time to think through the following liquidation process and closeout process.
Where will I store the factory closeout items if purchased in bulk? This is a great question because unless you already have a closeout buyer lined up in advance, you will have to find a 3PL warehouse to store your excess inventory. 3PL warehouses are businesses that will handle all of your inventory, packing and shipping for a fee. If you accumulate too much inventory in a 3PL warehouse you may need to liquidate to save money on excessive warehouse fees. Slow moving products are very costly in a 3PL warehouse and in many cases they can be disposed of. Sometimes, a company will simply walk away from any goods in a 3PL warehouses, creating a situation where the company just wants the goods out.
What types of products do I want to buy? Closeouts come in all different shapes and sizes. Some overstock buyers only carry closeouts of housewares and gift items. Other overstock buyers specialize in lawn and garden closeouts or excess inventory of home décor. No matter what you are selling, there are different wholesale liquidators for all categories of liquidations.
Is there an actual need for the products that I plan to re-sell? Let’s face facts, even though closeouts can be of high quality and first quality merchandise, most closeout inventories are not essential products like food and grocery products. When wholesale liquidators are contacted about buying excess inventory most times the products are not essential. Closeout toys, closeout sporting goods and overstock home décor are things we can all live without. So there may be a need, but these products are not essential.
How do I plan to pay for the factory closeouts? When a business makes the decision to liquidate an entire warehouse, or discontinue certain products, they expect to be paid quickly. Part of the reason businesses liquidate inventory to overstock buyers is to quickly generate cash for other purposes like meeting payroll or paying down debt. Excess inventory buyers are expected to have large amounts of cash on hand to take advantage of closeout opportunities and liquidations.
How will I sell the factory closeout items once I receive them? Don’t forget, once you find some great closeouts and put up hard earned money to buy them, you need a customer. Closeout websites and closeout distributors are both examples of good customers to buy your overstock inventory.
Will I sell the products on eBay, Amazon, Flea markets, online retail stores, craft fairs, etc.? There are many ways you can sell closeouts and excess inventory buyouts. Amazon is a good option, but keep in mind there are many Amazon sellers today who are shutting down their FBA seller accounts, and making removal orders to closeout distributors just to get rid of the inventory and stop bleeding from long term expensive Amazon storage fees. There is no point in holding dead inventory that isn’t selling; it is always better to liquidate dead stock and stop paying high warehouse fees.
The clearer you are about your game plan, the better. This simple step will save you a tremendous amount of time and energy. To start purchasing factory closeout merchandise, you will need to retain a resale permit (sales tax number). Just contact your local government agency and take the necessary steps to obtain this permit for buying and selling closeouts. For instance, if you live in California, you would contact the California Department of Tax and Fee Administration. Getting a resale permit is very easy to do and is essential to your success.
There are a variety of excellent resources available to help you find factory closeout suppliers. Here are four great options to help you get started: Keep in mind there are always going to overstock and liquidation opportunities as long as you are always looking. Businesses are always changing packaging, discontinuing old products, making room in the warehouse for new products, and shutting down warehouses. These are all situations that create opportunity for overstock buyers and excess inventory buyers, liquidation companies, closeout liquidators and buyers for discounted merchandise.
The quickest way to find factory closeout merchandise is to do an online search. A great website to check out is liquidation.com. Some other options include merchandiseusa.com and closeoutcentral.com Any simple Google search for these terms will turn up buyers: closeouts, where to sell excess inventory, looking for overstock inventory buyers, need to get rid of old inventory, making room in warehouse for new products, liquidating entire warehouse full of inventory, etc.
Searching classified ads of genuine trade publications can also be a great way to get access to items in bulk. For example, California Apparel News is a popular trade publication that offers excellent resources in the classified section for deeply discounted merchandise. You might find bulk closeout buyers and apparel distributors for overstock inventory. They may even be able to re-sell your closeouts into markets outside of the United States. This is especially important for name brand closeouts where it is important to keep goods out of the normal distribution channels and regular customer base.
Jobbers are people who specialize in finding bulk closeout products at discounted rates. The easiest way to find jobbers is to run a Google search for a wholesale jobber. Other ways to contact jobbers are through the yellow pages or even industry newsletters and classifieds. Trade shows an effective way to find businesses interested in getting rid of large quantities of closeouts. These businesses often don’t know who to contact to liquidate inventory and you can contact them with your closeout services and explain the closeout process and liquidation process.
Another great option to find factory closeouts is making friends with salespeople at manufacturer outlets. Companies such as TJ Maxx, Marshalls, and Burlington Coat Factory all have access to high-quality closeout items. By finding out when these outlets receive new merchandise, you can get access to some amazing factory closeout items.
Choose the Right Supplier. Choosing a good closeout supplier will make a tremendous difference in your business. The following are a few strategies to help you get started with the closeout process:
Ask for references. Closeout companies and closeout brokers worthy of your business should be more than happy to give you references for closeouts they recently purchased.
Check out the Better Business Bureau or SquareTrade to learn more about the supplier If they have good experiences with other companies liquidating inventory, you will be able to find this out. There is no reason to deal with closeout buyers who have anything less than an excellent reputation.
Understand shipping charges. When it comes to factory closeouts, you are typically responsible for shipping. So take the time to learn how much it will cost you to receive your factory closeouts. For example if you are buying closeout furniture the shipping costs will be much more than excess inventory of toys. If you are liquidating truckloads of housewares it may cost less to ship than buying closeouts of plush.
Buying factory closeouts is a very successful and proven way of generating revenue for your closeout business when done right. Therefore, take the time to follow the steps outlined above. If you think through your game plan and do the necessary research, you will find that buying factory closeout merchandise can be a fantastic approach to finding quality products at deeply discounted prices.
Merchandise USA specializes in buying entire warehouses and liquidating inventory. If you are considering liquidating inventory or shutting down your 3PL warehouse we can help you. We are overstock buyers and liquidators for toys, sporting goods, housewares, home décor, lawn and garden closeouts, etc. Call us if you have too much inventory in your warehouse and if you need to make room for new products.