Liquidation is a category of merchandise that can be very profitable to the reseller. It can be very challenging for the inexperienced, so here are a few tips to help you get started.

1. Location is KEY. You, as the buyer, are paying the freight charges to have the inventory delivered to you (even if the seller tells you they are paying for shipping). The closer you are to the origination location, the less you will have to pay to transport the goods. Shipping pallets or truckloads of liquidation merchandise is not cheap.

2. Determine if the liquidator is also selling through retail channels. If they are also selling on eBay, Amazon, etc., chances are they are pulling the best merchandise and retailing it there, selling the remaining items as liquidation. Even if they don’t pull all of the best items for themselves, you don’t want to go into competition with your supplier. They are getting the merchandise cheaper than you and can beat you on price. Every time.

3. Your Reputation is CRITICAL to your success. Your reputation in dealing with liquidators will precede you, so manage your reputation with care. In the liquidation business, you need the suppliers more than they need you.

4. Read the Fine Print. It’s the things you agree to but didn’t read that can come back to bite you. The contracts that you didn’t create are not for your protection. They are not for your benefit (in most cases). Know what you are signing. If the liquidation deals are “so great” that the suppliers want you to sign without reading – Walk away.

5. ALL SALES ARE FINAL. […]