What a Buyer Should Know
Pallet liquidation is a process where a company sells off merchandise in bulk, often at a discounted price, to clear out excess inventory or to generate quick cash flow. The pallets may include a large quantity of a product or a mix of products, such as overstock or discontinued items, customer returns, or refurbished goods. This type of liquidation can be an effective way for businesses to recover some value from surplus inventory and free up warehouse space while offering buyers the opportunity to purchase large quantities of merchandise at a lower cost.
In this pallet liquidation blog you will learn:
What is pallet liquidation?
- How pallet liquidation works
- How to find pallet liquidations near you
- Benefits of buying pallet liquidation
- Making a profit reselling liquidated pallets
What is Pallet Liquidation?
Businesses use pallet liquidation to help get rid of excess inventory quickly and efficiently. When a business has excess inventory, it ties up valuable warehouse space and can lead to increased holding costs. Pallet liquidation offers a way for businesses to recover some value from these excess goods by selling them in bulk at a discounted price. This can free up space in the warehouse and generate cash flow that can be reinvested into the business.
For pallet buyers, pallet liquidation offers them the opportunity to purchase large quantities of merchandise at a discounted price. This can be especially appealing to resellers who can turn around and sell the products individually for a profit.
Common industries that use pallet liquidation
Pallet liquidation is commonly used in a variety of industries, including:
- Retail: Retailers often use pallet liquidation to clear out excess inventory, overstocked items, or customer returns. Most big box retailers you know and recognize like Walmart, Target, Costco, The Home Depot, and Lowe’s all utilize pallet liquidation as a part of their reverse logistics strategy. You can buy liquidation pallets by store on their private online storefronts.
- Manufacturing: Manufacturers may use pallet liquidation to dispose of excess raw materials or finished goods that are no longer needed. Manufacturers like GE, Whirlpool, and Unilever, to name a few, will also use liquidation as a means to clear out damaged and defective products, or items reaching their sell-by dates.
- E-commerce: E-commerce businesses must also clear out returned or overstocked items that are taking up space in their warehouses – just because a business is online does not mean they don’t have liquidation to deal with!
Pallet liquidation is a common practice across a wide range of industries, as it provides businesses with a cost-effective way to handle excess inventory and generate revenue. Virtually any merchandise you’re after can be acquired via liquidation pallets.
How Pallet Liquidation Works
For a retailer, the pallet liquidation process typically involves the following steps:
- Assessment: The first step is for the seller to assess and sort their inventory to identify overstocked, slow-moving, or discontinued items.
- Palletization: After assessing inventory, the seller will typically palletize the items by product type, condition, or other criteria. It can vary by retailer and/or warehouse.
- Pricing: Sellers aim to make a certain percentage of recovery from pallet liquidation. Factors such as the condition of the items, the quantity being sold, and the time of year must all be considered.
- Marketing: The seller will typically market the pallets of inventory to potential buyers, sometimes through a pre-existing network of contacts or by listing pallets for sale online.
From here, buyers jump into the pallet liquidation process:
- Sourcing & Bidding: Business buyers can explore available pallet liquidation for purchase on marketplaces such as B-Stock. An online auction setup involves competitive bidding, where the highest bidder wins. Auctions eliminate the need for individual negotiations and ensures there are no price markups on inventory. Depending on the buyer’s needs, inventory can be locked in via contracts.
- Payment: Common payment methods for pallet liquidation include wire, bank transfer, or in some cases, credit card. A sales tax number (also known as a reseller’s certificate) enables buyers to purchase goods tax-free. Another perk of pallet liquidation!
- Shipping & Delivery: The shipping method will vary depending on the seller. Pallet liquidation can be shipped by freight providers like C.H. Robinson by the truckload (up to 24 pallets) or less-than-truckload (usually up to 12 pallets).
- Sell: Once inventory is secured, the reselling process can begin. We cover ways to sell pallet liquidation down below!
The pallet liquidation process can vary depending on the specific needs of the seller and the buyer. The steps above are a general roadmap to clearing out excess inventory.
Types of pallets that can be liquidated
Pallet buyers have all sorts of inventory needs, depending on what’s right for their resale businesses, which is why understanding the different types of inventory available can help your business make the right move.
- Overstock: These are products that were ordered in excess and not sold through traditional channels.
- Returns: These are products that have been returned by customers due to various reasons such as defects, shipping errors, or buyer remorse. Pallets can be specific to dot com inventory, too, or merchandise that comes back through online returns.
- Refurbished: These are products that have been repaired, restored, or reconditioned to work like new.
- Discontinued items: These are products that have been discontinued by the manufacturer and are no longer being produced.
- Shelf pulls: These are products that have been removed from store shelves to make room for new stock or promotions.
- Mixed pallets: These are pallets that contain a mix of products from different categories, such as electronics, clothing, toys, or home goods.
Factors that affect the value of liquidated pallets
Every liquidation pallet is different. This means the value of liquidated pallets can vary, too. These are the factors that affect the value of liquidated pallets:
- Condition: The condition of the items in the pallet can significantly impact their value. Products that are new, unopened, and in their original packaging typically have a higher value than products that are used, damaged, or incomplete. These are essentially resale-ready and will fetch the highest profits.
- Quantity: Buyers are often willing to pay more for larger quantities of the same product.
Quick FAQ: What is a SKU?
A stock keeping unit (SKU) is a unique code retailers use to identify each of their products in order to manage inventory.
- Deep SKUs: pallets contain many items of the same product/SKU.
- Shallow SKUs: pallets contain different products/SKUs.
- Market demand: Take note of the current (or future) demand that items in liquidation pallets have. Products that are in high demand or have a strong resale value typically command a higher price.
- Seasonality: The seasonality of the products can also impact their value. For example, off-season inventory can be acquired for much cheaper.
- Brand: The brand of the products in the pallet can also impact their value. Popular, well-known brands like Nike and Adidas will command a higher price than private label (i.e. manufactured by a third party and sold under a retailer’s name) or more generic brands.
Finding Pallet Liquidation Near Me
Using an online liquidation marketplace eliminates the limitations of local pallet liquidations and can dramatically increase the scope of products bought and sold.
Traditionally, buyers only had one option – going through traditional liquidators and ‘Jobbers.’ However, this can lead to price markups and cherry-picking of the best inventory on the pallet. As a buyer, you can now eliminate individual negotiations by going straight to the source, ensuring reliability and regularity in the goods you purchase.
On B-Stock, buyers have direct access to the world’s best brands. Retailers and manufacturers supply a steady stream of inventory to sell via their online storefronts. Find liquidation pallets and truckloads to source inventory from wherever is most convenient with facilities across the US and EU.
Another way to find pallet liquidation is to shop by retailer. Businesses can buy return pallets directly from retailers with ease. Many retailers bypass traditional liquidation methods and adopt technology-based programs for excess inventory into their overall business plan – which is how liquidation pallets have become so readily available online.
You can find pallet liquidation across the broad retail spectrum. From apparel and home goods to furniture and electronics, any consumer product you can find on shelves can ultimately make its way to retailers’ official storefronts on B-Stock. Choose from several buying methods such as auctions, contract agreements, and direct sales.
Find pallet liquidation from the world’s largest retailers and manufacturers.
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Benefits of Pallet Liquidation
Cost savings for businesses
Pallet liquidation can offer significant cost savings for both retailers and business buyers. Let’s break down these benefits.
Benefits for retailers:
- Clearing out excess inventory: By liquidating excess inventory, retailers can free up valuable warehouse space and reduce the costs of storing unsold or slow-moving products.
- Generating revenue: Liquidating excess inventory through pallet sales can help retailers recoup losses on otherwise unsold or damaged inventory.
- Avoiding disposal costs: Rather than paying to dispose of excess inventory, retailers can recover some of their costs by selling the inventory through pallet liquidation.
Benefits for business buyers:
- Tax-free: Liquidation pallets can be purchased without paying local sales tax if a sales tax number (also known as a reseller’s certificate) is provided. Buyers can obtain more merchandise to grow their business while passing those savings on to customers. (Your business is responsible for collecting tax from customers when an item is sold.)
- Bulk buying options: Buying in bulk quantities lowers the cost of each unit, and with shipping costs considered, this can be an essential part of a buyer’s potential profit.
- Acquiring hard-to-find items: Liquidated pallets may contain items that are difficult to find or no longer in production, which can be valuable to resellers or buyers looking for spare parts.
Overall, pallet liquidation can be a cost-effective way for retailers to manage their inventory and reduce their costs while still generating revenue. For buyers, it’s an efficient and profitable way to acquire large quantities of inventory at a good price.
Environmental benefits
Pallet liquidation can also offer several environmental benefits, including:
- Reducing waste: By liquidating excess inventory, businesses can avoid throwing away products that would otherwise end up in landfills. This helps reduce the amount of waste generated by businesses and supports a more sustainable approach to waste management.
What is the Circular Economy?
The Circular Economy has three main components:
- Design out waste and pollution
- Keep products and materials in use
- Regenerate natural systems
The Circular Economy could generate $4.5 trillion of additional economic output by 2030. (Accenture)
- Promoting reuse: Liquidated products can find new homes via resellers. The secondary market promotes a culture of reuse and extends the life of products that might otherwise be thrown away.
- Conserving resources: By extending the life of products through pallet liquidation, fewer resources are needed to produce new products. This helps conserve natural resources and supports a more sustainable approach to manufacturing and production.
Making a profit reselling liquidated pallets
Thousands of buyers have established their own businesses around reselling liquidated pallets. There are several routes you can take to earn a profit with liquidation inventory:
The potential for profits depends on several factors, such as the condition, quality, and quantity of products in the pallet, the market demand for those products, and the price paid for the pallet. Don’t forget to account for the costs associated with receiving said inventory!
Another key factor is the buyer’s ability to effectively market and sell the products. Buyers may need to invest time and resources into listing the products online, packaging and shipping the products. Not to mention handling customer service inquiries and returns. It is important to have a plan in place for selling the products and to factor in these costs when evaluating the potential for profit.
If you’re unfamiliar with the resale market for the products you’re purchasing, including the price point and the competition, it can be harder to maximize profits. So if you don’t have an idea of where you want to start, test the waters with a category you’re comfortable with. For example, if you know the ins and outs of tech and other electronics, start by purchasing a pallet of last year’s models for a deep discount.
Overall, there is potential for profit through reselling liquidated pallets, but it requires careful evaluation and planning to ensure that the investment is worthwhile.
Search for Nearby Liquidation Pallets!
Search liquidation auctions near you and find hundreds of auction lots available to your business. Whether you’re searching for a specific product category, retailer, or condition, plenty of liquidation pallets are ready for bidding and buying today.
Have questions about buying or selling on B-Stock?
Frequently Asked Questions
Hi there! Have questions about buying or selling on B-Stock? We’ve got answers.
In most cases, the products within liquidated pallets are safe to buy and sell, but there are some potential risks that buyers should be aware of. For example, liquidated pallets may contain products that are damaged or defective, which could hurt the return on investment for buyers or, if resold, pose a safety risk to consumers. Buyers should carefully inspect the products within the pallets to ensure that they are in good condition and safe to use.
Additionally, liquidated pallets may contain products that have been recalled or approaching their ‘sell-by’ date. Buyers should research the products within the pallets to ensure that they are not subject to any recalls or bans, as well as the marketplace guidelines for third-party resellers.
To ensure the quality of the pallets you are purchasing through liquidation, you should follow these steps:
•Research the seller: Before purchasing pallets from a liquidation company or reseller, research the company to ensure that they are reputable and have a good track record. Look for reviews and ratings from other buyers to get an idea of the seller’s reputation.
•Inspect the pallets: If you’re buying in person, inspect pallets to ensure that the products are in the agreed-upon condition and are properly accounted for. Look for signs of damage or wear, and check to see if any items are missing or broken – if items are meant to be like-new then this could be a red flag. Note: Some sellers may have slight variances in how they list product conditions.
•Manifested vs unmanifested pallets: Lot manifests include important information such as quantity, category, item number or UPC, MSRP, and an item description. Manifests allow buyers to make informed decisions and calculate potential profits. Unmanifested lots can be a free-for-all in terms of products and merchandise will not be itemized.
•Research the products: Do some research on the products within the pallet to ensure that they meet all relevant safety standards and regulations. Check to see if there have been any recalls or safety concerns associated with the products.
•Ask questions: If you have any questions about the pallets or the products within them, don’t hesitate to ask the seller. A reputable seller should be able to answer your questions and provide any additional information you need to make an informed purchase.
•Check the dispute policy: It’s important to note that most pallet liquidation is sold as-is, and there are usually inventory discrepancies allotted up to a certain percent variance. It’s important to know how a seller handles disputes and mediation.
In general, liquidated pallets can be purchased at a significant discount compared to their retail value. Prices may range from a few hundred dollars for pallets of low-value products to several thousand dollars for multiple pallets of high-value goods. The cost per unit will typically be lower for larger pallet purchases, as the seller may be more motivated to move a larger volume of inventory at once.
Buyers should also consider any additional costs associated with purchasing liquidated pallets, such as shipping, lift gate fees (if you don’t have a loading dock to receive shipments), and storage fees. These costs vary depending on the location of the seller and the buyer, as well as the size and weight of the pallets.
Overall, the cost of liquidated pallets can be a good deal for buyers who are willing to invest the time and effort to find the right products and negotiate a fair price or participate in online auctions. However, it’s important to carefully evaluate the cost and potential profit of each pallet to ensure that it’s a worthwhile investment.
