When a particular company goes insolvent and is incapable of paying off its debts, the company’s assets need to be sold off. This is done to collect cash to pay off investors, shareholders, creditors, etc.
To resolve this, liquidation of assets comes in. This is hastily handed over to liquidation stores to get rid of, at the best price they can get. Mostly, they are sold at markdown prices as clearance to dissolve the company soonest possible. Many parties are interested in purchasing these items at discounted rates.
Business owners often wonder how to start a pallet liquidation business or wholesale liquidation company.
You must keep these 9 factors in mind to start a successful liquidation business in your city.
- Choose the right products – Higher the demand for a certain category of products, the easier it is to sell them. The liquidator must know the market they’re catering to and what they are looking for in a liquidation sale.
You can demarcate your target audience and bring in products of a certain niche that serves them. The knowledge of other competitors gives a better idea of how to price your items. Research your competitors actively and use them to your advantage.
- Supplier- Find a good supplier who sells you items at a rate low enough for you to make some profit. The items you receive from them must be in a good condition. Most importantly, these suppliers should be reliable, honest, and definitely not cheat.
- Advertising– Promote your store and create awareness around what you are selling and the discounted rates you’re selling it at. You can draw people in through sales to buy things at a cheaper cost. Distribute flyers, put up posters, and boards, and use social media as a marketing tool to promote yourself. You must build hype or curiosity around your store.
To begin with, display the discounted figures or offers you are running on a board outside your store. Without any doubt, you can affirm that there is a significant rise in demand to buy liquidation pallets in Connecticut.
- Thorough analysis– Before stocking up products in bulk, you must put in thorough research, analysis, and calculations before paying that cost. The investment you make today is for you to make a profit tomorrow, not a loss.
You must have confidence in the product’s potential, quality, and lack of damage. Be wise with the amount you invest in your liquidation store.
- Investment– You need to invest some amount as an initial set-up cost for your liquidation business in the beginning. You need a significant amount of stock to set up a store and draw in customers.
You will need to hire staff to overlook the store and attend to customers. However, there is no need to go overboard in a liquidation business. People come for the low cost and not a premium experience.
- Location– Choose an attractive location that stays busy. A shopping market, mall or a touristy area would be a great choice as it draws in traffic. Most people are there to shop and the distinction in prices will be an incentive for them to visit your store.
As a result, your liquidation store will get more visibility, and bring in more customers. This could help you recover your setting up costs overall.
- Partnership– Having an experienced partner to do business with, can be a huge plus point. Someone who has prior experience in the retail business and can come up with great marketing techniques is good with sales and could be your biggest strength.
Their expertise, technical experience, and know-how can benefit you in many ways. They might even bring out the best in your liquidation business.
- Online Store– Create a presence of your liquidation store online to make it more accessible and show in searches for “liquidation stores near me”. Online shopping is the preferred option.
This way, you can even run ad campaigns, share discounts, and boost your posts to increase visibility, and get more buyers or even investors.
- Authorization– You need to be a legitimate company to source liquidation inventory. You need to register your business officially.
By virtue of getting a resale certificate, you get exemptions from paying tax. With this kept in mind, you appear more credible in the market as well.
Amassing liquidation pallets and setting up a business is not as easy as it sounds. To be extremely successful and stand out in the market, you have to do it the right way. No shortcuts, shady schemes, or dealing in faulty products, and you’re good to go.