Posts Tagged ‘liquidation’
Buying and Selling Liquidation Products - Must-know information that the liquidation companies won’t tell you!
Wednesday, January 16th, 2008
Think liquidations might be right for you or your business, but you’re not exactly sure what they are? Well, liquidations are simply products that a company doesn’t want anymore. Maybe they couldn’t sell them or they’re damaged or missing parts - but they’ve been taking up space in the warehouse and collecting dust, so they need to go. In fact, many companies are so desperate to get rid of some products that they’ll sell them for mere pennies on the dollar. Does that mean that buying liquidated products means you’re getting a great deal? Sometimes, but not necessarily.
What to know about buying liquidated products
The first thing to remember is that liquidations are products that someone else couldn’t sell. Of course, that doesn’t mean you can’t sell them - it just might not be as easy as you think. Also, liquidations typically are divided into categories (and a good liquidator will tell buyers the condition of their liquidations). Don’t just assume all liquidations are new and in the box - because many times that is not the case. Here is a typical list of liquidated products by type:
New - This is the best type of liquidated products to get. They’re new, in the box, and have never been sold before. It doesn’t mean they’re brand new - these products could have been sitting in the warehouse for 5 years, you just don’t know. For products with an expiration date, it’s best to ask what the expiration date is on the products or to avoid them all together.
Used / Returned - These products have been sold, used and then returned. They may or may not be opened or have boxes. Some may have missing parts, manuals, etc. Some may be defective. You won’t really know how many you are able to sell until you get the shipment and are able to go through them, one by one.
Refurbished - These products were used by someone and broke, and were then rebuilt to work again. Refurbished products may or may not be in original packaging, or come with original accessories. It’s also possible that they show signs of use.
Shelf pulls - These are products that were for sale in retail stores but never sold. They may have multiple price tags on them; they may be used, damaged or missing original packaging and materials if they were display models.
Salvage - Basically these products are just a pile of junk and are good only for parts.
Now that you know that liquidations come in all forms, you’ll be better prepared to ask questions about the condition of any products you’re interested in.
What to know about selling liquidations
Most liquidators are interested in buying products by either the pallet or the truckload. So, if you only have a few boxes worth of goods, you might want to consider selling them as a lot on eBay instead.
After you’ve determined that you have enough products to sell to a liquidator, you should determine what category (or categories) your products fall into. Obviously, the better condition your products are in, the higher the price you’ll get from a liquidator.
With liquidating products, the goal is to get rid of your products, not make a profit. Sure, you’ll make some money, but it’s doubtful you’ll get back what you paid in the first place. But, getting rid of the dust collectors means you’re not paying storage fees on non-moving products - and now you can bring in some new inventory!
Finding a liquidator online is easy. You can begin with a site like Liquidition.com , or you can search online for liquidators. Just be sure to research any company you plan to do business with.
Tags: Carrie Hinkel, liquidation, Liquidation.com, Product Sourcing, source, sourcing liquidations, sourcing products, tips
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How to Deal with Product Turnover
Friday, November 16th, 2007
There are many ways that you can evaluate how well your business is doing. The most obvious, and most often used, is the big number: the dollar figure which indicates whether your business operated at a profit or a loss in a given time period.
But knowing this number alone will not help you to improve the bottom line of your business; in order to do that, you need to break your business down into smaller areas to look at specific steps you need to take to get that profit margin up.
One of the areas that can make a lot of difference in the end amount of money that your business makes is the area of product turnover. In this article, we’re going to look at ways in which understanding product turnover can help you grow a better business.
What Is Product Turnover?
The concept of “turnover” is familiar to most people once they enter business, even at the labor level. It refers to a specific number of identifiable factors “leaving” a business. You have probably heard of employee turnover; when that term is used, the factors leaving the business are the employees, and a high turnover is a bad thing.
However, there is another side to the turnover coin, and that is product turnover. In this case, the items leaving the business are the products the business is selling, and it is always calculated in the form of sales. So in the case of product turnover, a high number is a good thing!
You may also hear product turnover referred to in the pejorative sense; that is, a certain product has sat on the shelves for too long and has become useless or outdated, at any rate not a good candidate for sale at the prices you need to make a profit. In this case, the turnover will refer to the restocking of new products to replace old and outdated products.
However, this is not true turnover in the sense of marketing. True product turnover occurs when an item sits in storage, and is then sold. Outdated items will inevitably figure into any calculation to find the true product turnover ratio.
Calculating the Product Turnover Ratio
Calculating your product turnover ratio is fairly easy, especially if you are good at the record keeping side of things already. Just take your cost totals for goods over a specified time period (a week, month, year, and so on) and the average inventory for that time period as well.
Dividing the cost of goods by the inventory will result in your product turnover ratio. A small number means that the products you carry are not selling quickly enough.
The idea here is to make changes that will cause your product turnover ratio number to go higher. You can usually do this by coming up with a plan to meet the demands of your customers more effectively; a low number means your supplies are outstripping your demand, resulting in excess inventory.
Solutions to Consider
If you have a low product turnover ratio, there are a few things you can do to at make your costs back on those products:
* Have a clearance sale - You can clear out your unsold products by holding a clearance sale at the end of a specified period of time (like the end of a season, for example). By offering deep discounts and doing some heavy promoting on your website or in your store, you can at least make some money back if the products sell).
* Sell the products on eBay - Many businesses have an eBay store or occasionally sell products on eBay that they’ve overstocked. You can either sell it with the Buy It Now feature, or set the opening bid at a clearance discount and see how much it ends up selling for. With this option, however, you’ll have to include your eBay costs in your margin - this may result in a smaller profit.
* Liquidate - If you have a large enough excess inventory, you might consider liquidating the products in bulk. You can either sell to a wholesale liquidator, or you can sell them through an auction platform like Liquidation.com at a wholesale price per unit.
Product turnover is inevitability for any business - not all of your inventory is going to be sold. The trick is to figure out the best mix of products and best pricing so that you can keep your turnover ratio high, as well as maximize your profits.
Tags: advice, excess inventory, Generating More Sales, Leeia Ladipoh, liquidation, product turnover, Sales, tips
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