Inventory Liquidation

Inventory Liquidation

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Business At A Glance

Inventory Liquidation

Startup Costs: $10,000 – $50,000
Part Time: Can be operated part-time.
Online Operation? No

Business Overview

Every year thousands of retail merchants andcorporations across North America go out of business, move, reform, andamalgamate, and often this results in billions of dollars worth ofstock and inventory becoming available at bargain basement prices.Purchased right and this same inventory can sometimes be bought for aslittle as five cents on the dollar.

Later this can often be resold foras much as five times the purchase price on a wholesale basis, and asmuch as ten times on a direct-to-consumers retail basis. A goodstarting point for purchasing bargain inventory (at least until thebusiness builds a reputation and contact base as a liquidator) is toestablish alliances with trustees that deal in commercial bankruptcies.

Generally the trustee appointed will either arrange to auction off theinventory assets of clients, put out a tender, or offer to purchase theinventory, which usually goes to the highest bidder on a cash basis.Reselling the inventory can be accomplished in a few ways includingselling the inventory to retailers on a wholesale basis or selling theinventory in smaller quantities to other inventory liquidators.

On adirect-to-consumer retailing basis, the inventory can be sold through acompany-owned liquidation store or stores, or monthly inventoryliquidation sales can be advertised and held over a few days inshort-term rental premises. However, there is a down side to thisbusiness, which is purchasing inventory that is difficult to sellregardless of price.

This is a very common mistake for first timers inthis industry. Traditionally, the best type of products to purchaseunder inventory liquidation conditions are power and hand tools,nonperishable food items, books, music CDs, toys, building materials,and electronics. Always stay clear of products that have a limitedshelf life, or that have special warehousing and transportationrequirements.

Once again, this is the type of business where theability to profit will greatly depend on a number of factors such assales volumes, markups, and product costs. Having personally dabbled inthis industry in the past, I can assure you that it is possible to make$10,000 per month or more, providing a carefully planned andwell-researched approach to the business is executed.

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