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Business Idea Center - Inventory Liquidation

Inventory Liquidation

Business At A Glance
Startup Costs: $10,000 - $50,000
Part Time: Can be operated part-time.
Franchises Available? No
Online Operation? No

Business Overview

Every year thousands of retail merchants and corporations across North America go out of business, move, reform, and amalgamate, and often this results in billions of dollars worth of stock and inventory becoming available at bargain basement prices. Purchased right and this same inventory can sometimes be bought for as little as five cents on the dollar. Later this can often be resold for as much as five times the purchase price on a wholesale basis, and as much as ten times on a direct-to-consumers retail basis. A good starting point for purchasing bargain inventory (at least until the business builds a reputation and contact base as a liquidator) is to establish alliances with trustees that deal in commercial bankruptcies. Generally the trustee appointed will either arrange to auction off the inventory assets of clients, put out a tender, or offer to purchase the inventory, which usually goes to the highest bidder on a cash basis. Reselling the inventory can be accomplished in a few ways including selling the inventory to retailers on a wholesale basis or selling the inventory in smaller quantities to other inventory liquidators. On a direct-to-consumer retailing basis, the inventory can be sold through a company-owned liquidation store or stores, or monthly inventory liquidation sales can be advertised and held over a few days in short-term rental premises. However, there is a down side to this business, which is purchasing inventory that is difficult to sell regardless of price. This is a very common mistake for first timers in this industry. Traditionally, the best type of products to purchase under 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 limited shelf life, or that have special warehousing and transportation requirements. Once again, this is the type of business where the ability to profit will greatly depend on a number of factors such as sales volumes, markups, and product costs. Having personally dabbled in this industry in the past, I can assure you that it is possible to make $10,000 per month or more, providing a carefully planned and well-researched approach to the business is executed.

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