But where do you find this liquidation merchandise? You can buy pallets and truckloads of merchandise from wholesale liquidators or simply buy direct from the original retailer who is liquidating excess, unwanted stock.

I should also mention that you can buy liquidation merchandise from Brokers. A liquidation broker is someone who finds liquidated merchandise and then connects that excess inventory with a buyer. The broker then charges a markup per item or commission on your total purchase price.

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Some tv’s, stereos, DVD players, digital cameras and the like are returned due to impulse purchasing. What happens to the all of the customer returns? What if a portion of the salvage returns are damaged?

Big box retailers like Best Buy, Walmart, Kmart, Costco, Sams Club and Target will liquidate customer returned electronics. By liquidate I mean re-wholesale to smaller retailers and eBay auction sellers.

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If you are looking to buy shelf pull handbags at liquidation pricing make sure you are buying direct from the original retail source. This will guarantee authenticity and give you the profit margin your business needs to be competitive.

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Some manifests will offer:

Item descriptions: Usually abbreviated, but most of the time you can discern what the actual item is.

Quantity: Before or after the description you should find an actual item count

Vendor Cost: This is the items original wholesale cost

Extended Cost: Simply the vendor cost multiplied by the quantity. For example: If you have 3 widgets and the vendor cost was $1.45 the extended cost would be $4.35

Original Retail: This is the cost of a particular item when it was being sold to the public. There are few liquidation manifests that list retail pricing.

A manifest can show you what you are buying, but you still should proceed with your pallet or truckload purchase with caution as I have been shorted on a few of my own manifested liquidation purchases.

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Great question…thanks for asking! I remember wondering the same thing when I purchased my first pallet of liquidation merchandise. No, there is no industry standard and you should expect a pallet of merchandise to be shipped and wrapped differently each time. Manifests are provided for some loads, but this is certainly not the norm. The key will be asking the seller what to expect when ordering your pallet or truckload of merchandise.

Wholesale Pallets will arrive in a variety of ways including:

Completely shrink wrapped – Most second party liquidators will tightly wrap your pallet. I always appreciated the fact that pallet contents can be disguised if the shrink wrapping is black as I never want the truck driver who is delivering my pallet to have any idea of its contents. Maybe I worry without cause, but I know that most of my LTL (less than truckload) purchases are sent to a terminal where they sit for sometime before final delivery to my location.

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I am thinking about exporting shelf pull apparel and designer bags, belts, wallets outside of the USA. I would like this merchandise to be new with tags and I would like to select brands. I am interested in Guess, Coach, Calvin Klein, Tommy Hilfiger and Victoria Secrets. The wholesalers that I have talked to only offer mixed merchandise and of course it is not as cheap as buying directly from the department store.

Pricing is very important to my business. In my country there are many wholesalers that sell similar merchandise for very little, and for me to enter that market I have to have similar pricing or even better prices. I know that my competitors have to be buying from direct sources. I have spent hours on internet, but unfortunately I cannot find information I need for my exporting business.

Is is possible to buy directly from a store selecting only the brands I am interested in? Can you explain what is the Federated merchandise that everybody is talking about?

The best answer…yes, and no. Just about every department store that liquidates stock is interested in one thing…moving merchandise as quickly as possible. To do this items are typically sorted into a few categories and then resold at low pricing. For example, In the apparel category you might find clothing, accessories and jewelry. It is best to ask what types of items you might find prior to making a purchase in any one category.

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Those entrepreneurs looking to fill this need are asking questions as many of them have little to no experience buying and reselling scratch and dent food. A reader of our business to business blog, The Closeout Industry, has a couple of questions before he opens his salvage grocery store:

Hello Robert, thank you for publishing Wholesale Liquidations Exposed. I just finished and am very impressed. I believe it will benefit me in a lot of ways, none more than avoiding some of the pitfalls you warn about. I do have three questions:

The Salvage Grocery section was awesome. The reason I was searching in this field was that I am exploring opening a salvage grocery. My question is about food stamps. I really need to be able to take them as this parish is very poor and it would greatly benefit. Do you have any experience in this area and if so, any advice. (I visited a salvage grocery store about 75 miles away and he said it was crucial to his business.)

Will 1000 sq ft be enough store floor space to start the Salvage Grocery? I am currently renting a lumber warehouse at the main intersection of our town where a hardware company used to be. The office area that was remodeled is where I want to put the store. It is about 19′ x 56′. It does have another 19 x 75 directly behind me that I can use for bringing in the pallets and sorting or, if necessary, I could incorporate it into the store. But it would need a new floor and ceiling if I did that. Let me know if you think a 19 x 56 is big enough to start.

PS: We’re in a rural area, the town has about 5,500 people and the parish (it’s Louisiana) has about 25K. The Walmart here also pulls in people from neighboring parishes. We have one other grocery store in town. We are on a main highway that has lots of traffic from 100K person city to the state capitol.

I would have to agree that accepting this form of payment is critical to the success of your salvage grocery store. Food retailers must apply to this merchant program much like you would apply for a standard Visa and Mastercard merchant account.

As I stress in our guide that you purchased, it would be best to round out your salvage food inventory with perishable food staple items including all dairy products along with fresh bread. In your local area it should not be difficult setting up accounts with perishable food distributors.

The Supplemental Nutrition Assistance Program, or SNAP, provides food assistance for an estimated 30 million US families per month. Eligible recipients use an electronic debit card to purchase food from grocery merchants much like a debit card.

Learn more about accepting food stamps (SNAP) as a retailer-

Retailer Eligibility
28 Page Retailer Guide

I believe you can get started in a small space, but you will begin to feel the stress of cramped quarters soon after opening in my opinion. Processing salvage food for retail merchandising is a daunting task that takes time and space. In addition, you will need storage for un-merchandised inventory awaiting placement in your store.

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Some third party reverse logistics companies handle electronics returns, refurbish products and sell consumer returns by the pallet and truckload in an effort to recoup otherwise lost dollars for the original retailer.

If interested, Wikipedia offers a full page description and explanation about the reverse logistics industry.

Why do we care?

Most of the suppliers I find today do not offer low enough pricing by the time you pay listing fees and final value fees on eBay. Profit margins are razor thin with electronics to begin with so adding additional costs to the sales equation leaves most aspiring eBay entrepreneurs in the dust.

I found a wholesale supplier of refurbished small electronics that I think will work for eBay sales. In fact, I have spent some time cross checking closed auction on eBay with this suppliers pricing. Researching closing completed auctions is simply a matter of choosing the “completed item” button when performing an advanced search. By doing this you can get a good idea if supplier pricing will allow enough profit margin to warrant an inventory purchase.

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Here is where I am in this whole thing… I bought into a product locater business opportunity, as a Broker. I ordered the start up kit, as well as the web site, and the whole shebang. I own my own domain, Maine Liquidators.

Over the past few weeks, I have forwarded them MANY very good finds, and all retail packaged, new and in good quantity, as well as arranged for product samples to be sent to this parent company.

Aside from the two week holiday they close down on, I have had no luck getting anything done through them, at least up to this point. I am quickly losing faith in them and the legitimacy of their operation, even before I stumbled upon your very excellent website and bought your book.

I have several very interested customers who have been up very friendly and willing to work with me, and they want to move their inventory fast, and some of it is very large!

I am stuck now, as I simply am not sure what to do next. I am not able to warehouse or buy liquidations myself, so the broker option is what i am most likely to succeed in doing.

I want to see if i can salvage this and make it work for me. Being a broker seems like the best thing for me…and any insights or feedback you can give me would be most appreciated. Thank you very much, and i wish you a happy and profitable new year.

Sincerely….Jim

Here is my response to Jim:

Hello Jim! Thanks for the compliment on our guide. I am sorry to hear you have not had much luck with the Zaken Business opportunity, have you thoroughly read the portion of our guide where I show you exactly how to become a liquidation merchandise broker? You truly do not need to buy a program where you are locating merchandise for a third party, you can locate merchandise and find buyers yourself!

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