It’s no secret that there’s a big market for selling products from companies that have gone bust. As you can imagine, it’s possible to get inexpensive liquidated items.
You might be thinking that there is a big opportunity to make a profit, and you would be right! But, here’s the thing: it’s also easy to get things wrong on an epic level! People new to buying liquidated stock often get stung by buying poor quality items.
Source: Wikimedia Commons
As you’re reading this, I will assume that you want to know how best to buy and resell such goods. Today I will share with you five golden rules that you must always follow. That way, you can pretty much guarantee a successful outcome! My five golden rules are as follows:
- Know the lingo
When it comes to buying liquidation stock, there are many different terms used. They can get summed up as follows:
- Liquidation stock – items taken from companies that have closed down;
- Clearance stock – new and unused goods that come from firms that have or are about to close down; and
- Customer returns – used items that may have faults.
You’ll come across liquidation auction sites using those terms and a variation of them. It’s crucial that you can assess which auctions are right for you.
- Avoid customer returns
Quite often you will come across liquidation auctions that get marked as customer returns. They’ll also come with a warning such as “these items are all untested.”
Yes, from a cosmetic point of view they might look attractive. But, if they are faulty, there’s little point in buying them. You can usually tell such items are a waste of money because of the low bids made on them.
Some entrepreneurs buy them in the off-chance they’ll find one or two units that work. Still, it’s nothing more than a lottery!
- Confirm the condition of the items
One annoying thing about these types of online auctions is some aren’t descriptive. You’ll often find that some “lots” don’t give you details on the condition of each item.
Other times, you’ll find the seller uses a grading system known only to them. If in doubt, ask for clarification before you bid.
- Use more than one liquidation auction site
When you want a bargain, you’ll most likely head to eBay. But, you’ll also check out sites like Gumtree and Craigslist too. The same concept should apply to the goods you buy.
Make sure that you check out several liquidation sites before deciding to buy a specific lot. That way, you can make sure you only bid on lots that offer the best value for money.
- Make sure you research selling prices
Before you bid on anything, you need to research how much those items sell for in the retail market. Are you planning to resell items on eBay and Amazon? If so, make sure you use a research tool like Terapeak.
Knowledge is power when it comes to gaining a competitive edge. Don’t get fooled into buying goods that you can’t make a profit on!
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