Friday, December 14, 2018

Building Margins with Liquidation Auctions

June 6, 2017 by mbrophy  
Filed under Flea Market & Swap Meet News

Liquidation merchandise, reverse logistics, and off-price goods are becoming an increasingly large segment of our industry. For flea market buyers and sellers, price is often the most important purchasing factor. Liquidated products are sold well below regular wholesale prices, and vendors are able to pass those savings along to shoppers to maintain a competitive advantage. Liquidated goods come from a variety of sources including closeouts, overstock, customer returns, and end-of-season products from larger retailers who can no longer sell those items on their shelves. These retailers then sell the products in bulk to wholesalers who can reintroduce them to other resellers.

An increasing number of wholesalers are redistributing liquidated goods through wholesale auctions. These auctions can be in-person or online. Merchandise is usually sold by a pallet or truckload. Selling in bulk helps keep costs down for wholesalers so retailers take advantage of the lowest possible prices., a division of American Merchandise Liquidators (AML), has one of the largest liquidation inventories in the business. They auction off truckloads, pallets, and entire lots of merchandise through live auctions and online bidding.

Mike White, vice president and COO for AML says, “We work with many well-known retail and dotcom stores. Items that are returned or considered overstocks, clearance or shelf-pulls are purchased by us for a fraction of the wholesale value and in turn, sold for pennies on the dollar to our customers.” Live auctions are held at AML’s headquarters in Foley, Alabama.

White advises that purchasing liquidated goods, especially in bulk, is different from purchasing regular wholesale. “I would always suggest that people do their homework to be sure they understand the liquidation industry. There is always an element of risk associated with purchasing liquidated goods, but typically, a customer will experience a 15% – 25% rate of products that cannot be sold, or are in need of repair.”

White tells The Merchandiser Group that the most common misconception about purchasing liquidated goods is that everything is new. “While there is usually a fair amount of clearance and shelf-pulls on each lot, the vast majority of the products are considered customer returns,” he explains. “An item that is returned to a retailer is usually returned because of buyer’s remorse, it didn’t meet their expectations, or in some cases, something was wrong with the item.” However, because liquidated goods are sold at such a fraction of the original price, even if some items from a pallet are not salable, the other items will more than make up the difference. White concludes, “Wholesale liquidation auctions are an especially valuable resource for flea marketers because the price point is so far below retail, and it gives them the variety they need to draw customers to their booth.” For more information visit

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