A good friend of mine, who has been in the wholesale/retail industry for over 30 years told me, “You make your money when you buy, not when you sell”.
At first it seemed a little backwards, but the more I got involved in this industry, the truer this statement became.
What it Means
Get to know your market and what the market will tolerate. At Liquidation.com, most of the sellers provide a manifest with retail or MSRP price tied to each item, so you can get an idea on the actual “value” of the total load. However, I implore you to do your homework. The pricing on the manifest may not be the same pricing in your area. For example, the MSRP for a Lawn Mower in California may be $700, whereas, the actual price in the store in North Carolina may only be $400. This makes a HUGE difference in your profit margins and how much you are truly paying for the load. So, this load may be a dream load in California, but a nightmare in North Carolina. Sample the pricing on the manifest before buying, make sure that your margins are still intact if the pricing on the manifest is skewed due to locale.
How Much of the Load is Sellable?
I have been buying truckloads of merchandise since 2015, with my first experience being 53 pallets of store returns from a major home improvement retailer which included items such as hammers, tile saws, tape measures, staple guns, etc. It seemed ideal, I mean, what can go wrong with a hammer? Well, lots of things. Keep in mind, store returns are returns for a reason. Hammers are not the same as a dress that may not fit, they get returned because of a defect, flaw, or use and abuse. Furthermore, out of 350 tape measures, 32, were sellable. Be prepared for this and understand what percentage of the load to predict as salvage. This will allow you to understand if that load is going to make you money before you buy it.
Know Where you are Going to Sell Before you Buy
I should have listed this tip first, as this is crucial for being successful. My good friend who taught me this business, explained to me how he had three avenues for making money: flea markets, local auction houses, and foot traffic at the store he once owned. Those were the three avenues for making money when he was in his prime. However, in today’s world, you have a wide range of selling tools available, from Amazon to Facebook. It is imperative to know and understand the selling tools and what products work with each one. My personal experience is that I avoid Amazon and eBay at all costs and sell only through local channels. I have been quite successful at this strategy; however, I know my market and I choose what products to purchase based on that knowledge.
In conclusion, I love what I do. I left corporate America and have a career that takes care of my family financially and allowed me to watch my son grow into a 5-year-old that only wants to work by his Daddy’s side. I wouldn’t trade this for anything.
