Mostly, I am buying Pallets of Merchandise
Over the past 6 plus months of my new life in the USA, I have been toying with different businesses or activites to earn a living. All of the things I have been doing have been making money, but each of them is making small amounts of money.
I feel that by focusing more on one business, I can get better and better at it, and grown mu success. Really, I have always believed in “small streams of income” – doing multiple things that each make smaller amounts of money. Now, I want to try doing one big thing!
Starting in March this year, I have been buying pallets of merchandise. I have decided to expand on that, and go all-in.
What are these pallets?
Well, a pallet is a wooden base that you stack boxes or other things on. They are commonly used in the logistics business. Of course, I am not just buying “pallets” but rather, I am buying a bunch of merchandise stacked on pallets!
I am buying goods from various classes:
- Customer Returns
- Shelf Pulls
- Out of Season Merchandise
- Warehouse Damaged Goods
- Whatever people are selling that I can make money on
When customers return an item to the store for a refund, in most cases, those items can no longer be sold as new. Many retailers, instead of dealing with these customer returns, just sell them off at pennies on the dollar to liquidation companies.
These customer returns are combined onto pallets and shipped to the liquidation companies.
As items go out of style or just need to be refreshed in the stores, the items are pulled off the shelf and liquidated by the retailer. These items are brand new, never used, and usually in excellent shape. From time to time, with shelf-pulls, you will get4 items that might be dusty or have minor damage from people handling them while on display in the store.
Many shelf-pull items are things that go out of style or are seasonal. It is just time to refresh what is being sold in the store. The store has made its money and is ready to liquidate the merchandise and get some fresh new styles on the shelves. One common shelf pull item is sunglasses.
Additionally, many shelf-pulls are things that have an expiration date and will soon be going out of date.
Out of season merchandise
These things are highly seasonal. Things like Christmas Merchandise, or Summer goods. When the season is over, many retailers will liquidate the items and move on to the next season of goods.
Warehouse Damaged Merchandise
Some percentage of goods in warehouses gets damaged. Maybe a forklift is going to pick the items up to move them, and it hits the box, leaving the box damaged. However, in most cases, these items are only box damage and no product damage. These items are liquidated, keeping merchandise pristine.
Where am I getting these items?
I have bought 8 pallets in the past 6 months or so. Three of those pallets were purchased just last week, so you can see that I am increasing my pallet purchases.
I have dealt with three different liquidation companies so far. Some of these liquidators are better than others, but so far all have been acceptable and I would deal with any of them again.
I generally scour the websites of these liquidators and choose pallets that I believe I can make a nice profit on.
How much do I pay for pallets of merchandise?
It varies. I used to pay as much as 40% of the retail value of the merchandise. Now, though, I am more selective. On the pallets that I bought last week, on each of them I paid 8% of the retail value. That means that if the pallet had $1,000 worth of merchandise (retail price), I would have paid $80.
To keep my costs down, I try to always buy pallets that are within 100 miles of where I live, so that I can drive there and pick up the pallet myself. On many of these pallets, shipping can be quite expensive. In the past, I have paid as much as $300 just for the shipping, and that was on a pallet that I paid $400 for, so $700 including shipping. I did, however, still make nice money on that pallet.
Paying 10% or less of the retail value, though, the profits can be quite nice.
How do I sell the items?
I use several different ways of selling the items.
My first choice would be to sell on Amazon. I am an FBA Seller (Fulfilled by Amazon). That means that I ship the items to Amazon, they sell the items and pay me a percentage of the sales price.
On Amazon, though, the item has to be pristine. No damaged boxes, no defects, etc. So, when selling palleted merchandise, it is not common to be able to sell on Amazon, although it is my first choice, if possible.
If the item is of a lighter weight that makes it easy and inexpensive to ship, eBay is the platform of choice. If the box is damaged that is not an issue on eBay. Also, even if the product is damaged, it is OK to sell on eBay. The key is, if there is any type of damage or imperfection in the item or packaging, you should disclose that on your item listing, so people know exactly what they are buying.
Generally, if there is damage to the packaging or item, as long as it still works fine, the buyer can save a lot of money compared to buying in the store. eBay buyers like that, they are usually looking for a bargain.
I like selling on FB. It is a local sale, so even if the item weighs a lot, you can still sell it nicely, because you don’t have to worry about the shipping cost.
I recently sold a high-value item on eBay that was also about 120 pounds. You can imagine, shipping was very expensive! I shipped it to a customer in Ohio, so fairly close to me, but the shipping was nearly $100. The customer paid the shipping and still got a great deal. However, if I could have sold that item on FB Marketplace (I tried, but it did not sell), I could have made more money on it!
Word of Mouth
Sometimes I sell just by word of mouth. Friends or even family members buy from me, and I always give them an extra-good deal. That makes for a simple and quick sale.
My Reseller Setup
Right now, I am working out of my house. Since we live upstairs, it can be a pain in the butt hauling all of this stuff up and down the stairs. But, I plan to expand this and probably move to a different location in the future. I want to build the business up to a higher level of sales to make sure that I can afford the rent of a retail building.
When or if I am able to open a retail location, I will still sell online through the outlets that I mentioned about, but I will also have a Thrift Store where people can buy merchandise in the store. I think this will be ideal.
Just this past weekend, I set up a better space for my business. I bought some shelving units to hold the items that I am selling, bout some equipment that I need to do this right, etc. So, as I said in the title of this article, I am all-in now.
Well, I better go and check the pallet liquidator websites to see what new items I can buy!