Setting up and opening your liquidation pallet reselling business can be daunting. But the challenges you face promise to be worth it—this business model is simple and can potentially be very lucrative for aspiring entrepreneurs.
It is low-risk, offers great returns, and requires no knowledge of manufacturing or product development.
At the same time, it requires quite a bit of study, time, effort, and hard work.
If you’ve decided to take a chance on yourself and jump into the world of reselling, here are ten crucial things to consider when opening a liquidation pallet business:
1. Studying Your Product and the Market
Before opening your business, you must learn all you can about the market and the product you’re about to sell.
Liquidation pallets contain many different products, and it is vital to know them well. Yes, variety is the spice of life—but it can be difficult to market and sell items you know nothing about.
We suggest obtaining pallets that have items that you are largely familiar with. They should be easier to sort through, repackage, sell, and market.
Once you’ve settled on the types of products you aim to sell, do thorough research on your competition. Where do they get their inventory? What is their pricing strategy? How do they advertise to their consumers?
Study your target market as well—to whom will you be able to sell these items? What demographics should you target your advertising efforts toward? How do you break into a saturated market and generate profits immediately?
The liquidation sale is perhaps the most important part of running a successful liquidation pallet business. Your ability to score good deals will determine whether you can offer your customers good products or not.
A liquidation sale is quite similar to a clearance sale. The discounted offers on the pallets only get better as the sale closes. But the catch is that the pallets with top-tier items will always clear out first and fast.
2. Sourcing Liquidation Pallets
After all that research, you must use everything you’ve learned to find a reliable supplier to buy liquidation pallets. You can go for conventional liquidators, B2B marketplaces, and many more. Whether you go with an offline or online route, the options are endless—unless you’re looking for a niche product, for which you may need to dig a bit deeper.
The most important part of this canvassing process is knowing how to sort through many different suppliers to find one you can bank on.
Here are some ways you can do that:
- Check for references
- Look at client reviews
- Try to get a sample order
- Ask for more information from the supplier
Good customer service, quick response time, fair contracts, and good feedback from clients should be considered when partnering with a supplier.
3. Storing Liquidation Pallets
Depending on what type of reselling business you want to explore, there are plenty of options for storing liquidation pallets.
When you’re considering the storage space, make sure to account for the space needed for the following:
- Receiving deliveries
- Unpacking and sorting pallets
- Categorizing, labeling, and cataloging products
- Storing inventory
- Arranging and packing orders
- Sending out deliveries
Make sure your chosen storage area has more than enough space for ease of movement and maximum productivity.
4. Sorting, Cataloging, and Labeling
Creating an efficient process for unloading, separating, sorting, and labeling the items will ensure the smooth flow of operations from top to bottom. Long before you bring in your first liquidation pallet, you must have a robust system in place.
Establish procedures for each step of the process: receiving inventory, sorting, labeling, storage, logistics, and delivery.
You can use inventory management software to streamline your operations and maximize efficiency.
5. Refurbishing Products
Despite your best efforts at researching and buying the best pallet, you may come across a few less-than-perfect products. But that’s no cause to fret over. By tweaking or repairing these items, you can still sell them for a profit.
What’s more? Smart and creative repackaging will set your brand apart from competitors.
6. Organizing Inventory
Tracking systems are one way to organize your inventory for easy fetching. But you also need a method of managing inventory inside your storage area for easy access.
Thankfully, this is not rocket science. You can use racks, shelves, and storage bins for storage and organization. Establish a system that suits your products and available space before your first pallet order arrives.
7. Pricing Strategy
Another crucial step that will determine the success of your new venture is planning your pricing strategy.
One good thing about liquidation pallets is you can get fantastic deals on good products. This will give you a healthy margin to score profits while also offering very attractive deals to your customers.
Do not take the shipping costs, stockpiling charge, storage, and other such expenses lightly. Learn how to calculate the pricing model as early as possible so you will not face financial difficulties down the line.
8. Selling Platform
Are you considering selling your products on a single platform?
We suggest you think bigger and give your products as much exposure as possible. Consider building your website and utilizing the many popular eCommerce platforms available.
Research is vital for this step as well. Look where your competitors and customers are, and put up a store there.
Do not take web design for granted. It involves more than just aesthetics—all of your website elements on the front and back end will significantly impact its overall performance, search engine ranking, customer experience, bounce rates, conversion rates, and more.
10. Marketing Plan
And finally, before opening your liquidation pallet business, you must have a strategy to market the products you will sell.
If you open an eCommerce store, your profits will depend mainly on your online marketing strategy. Search engine optimization (SEO), social media marketing, and paid ads—these are just some options that will help you draw your target audience’s attention and generate continuous sales.
Running a liquidation pallet business can be an incredibly rewarding and profitable venture if you can set yourself up for success.
We hope this guide will help you prepare your action plan. Soon, you can open your liquidation business and hit the ground running!