If you’ve been researching profitable business ideas that you can start with little investment, then you must have come across the tremendous potential for profits with a liquidation pallets business.
The liquidation market reached $644 billion in 2020 and is expected to continue growing, so rest assured you’re onto something big here.
If you are intrigued by this business model and want to learn more about it, you’re in the right place. In this guide, we’ll tell how exactly liquidation pallets businesses work and how you can expect to make profits by flipping pallets.
Excited to learn about this low-risk business opportunity?
Keep reading!
What Is the Liquidation Pallets Business?
The liquidation pallet business, also known as pallet flipping, involves buying returned goods and reselling them. Since the goods are categorized as “returned” and are only sold in bulk, they can be bought at a lower than wholesale price and sold at a price markup for profit.
Profit Scope of Pallet Businesses
The scope for profit depends on the price of the pallets, the condition of the goods, delivery charges, marketing, and more factors. Buyers can negotiate and compare pallets to get the best deal for the best inventory. Since the buyers can determine the price markup flexibly, it allows them a lot of scope for profit.
A liquidation pallet with 70% of the goods in optimum condition can generate around 30% to 40% in profits.
But the potential for profit is not the only benefit of flipping liquidation pallets. Here are some others worth considering:
● The investment is relatively small
● It has a lower risk of failure than some other business ventures
● Great scope for high profit margins
● Wide variety and choice of products
● Opportunity to minimize shipping costs
● Opportunity to buy directly from liquidators online and for very low prices
If you’re thinking a liquidation pallets business might be a good venture for you, keep reading to learn what you need to do next.
Making Profits Buying and Selling Liquidation Pallets
Following the right steps when buying liquidation pallets is half the work involved in making profits.
Research (Market and Product)
By researching the market, you can learn how much competition you will face and whether there is a demand for the products you want to sell. Doing your due diligence also tells you what commerce platforms will give your products the best exposure.
Product research will inform you about the product you’re trying to sell, its market price, resale value, and more. These metrics will help you determine how profitable the products are in the resale market.
Storing Liquidation Pallets
You may want to consider an organizational system to store your liquidation pallets for convenience. Since delivering goods on time is key to running any commerce business, maintaining an organized inventory is crucial too.
Here are some strategies to help keep your warehouse organized:
● List all incoming products
● Develop a cataloging system to identify each product and track its progress from arrival to delivery
● Systematically arrange products on racks and shelves
● Use robust inventory management software
Buying Liquidation Pallets
Buying liquidation pallets starts not with your first purchase but with researching the suppliers you can source products from.
You can find suppliers online and offline. There are various options, which can be divided into the following main categories:
● Liquidators – They buy resale pallets directly from retailers and offer them for a much lower price than wholesale.
● Manufacturers – They also offer their products at lower prices and sell liquidation pallets in larger quantities.
● Distributors – Similar to liquidators, but they sell their pallets at slightly higher prices.
You may want to buy from online liquidators if you want to purchase brand-name products like Lowes liquidation pallets for sale. They offer multiple lot sizes and various manufacturers at excellent prices. You can also score a better shipping price from liquidators than other suppliers since no middlemen are involved.
The most important thing to do during the buying phase is to closely consider the product manifests. These documents include the details about product conditions for each pallet. Use this information to make intelligent purchase decisions, as it can make all the difference in how much profits you can earn.
You can also opt to buy mystery pallets. They are comparatively cheaper than other types of pallets, but they involve more risk since there is no information about their contents. They’re always a hit or miss, best left to experienced resellers who can hedge their bets.
Selling Liquidation Pallets
Your research in the buying stage will help you choose the best platform to sell your goods. And after doing the calculations for buying price, shipping charges, storage costs, and expected profit margins, you should be able to determine the best selling price.
Take stock of all the products in each pallet, sort them into various categories, and price them based on their current condition. This is where your market research will come in—once you know the demand for such products, you can set prices that will attract customers and net you a healthy profit.
While products in good condition can easily be sold at a profitable price, poor-quality products don’t have to be a complete loss. Most used goods can be sold for a second-hand price, and damaged items can be refurbished too.
If you get some items that are not good enough to sell as they are but can be sold within a bundle, mix up multiple products and market them appropriately to drum up some sales.
To reach as broad an audience as possible, you can sell products on multiple platforms and maximize your profits. For example, top-quality products sell best online, where they get good exposure and fetch top dollar prices. In contrast, low-quality products might be best sold at local markets where you can slap on a lower price but still make a bit of profit.
Wrapping Up
Making money from reselling pallets is an excellent venture for new entrepreneurs who prefer business models that require little capital investment and risk. All you need is to find the right supplier, develop a good understanding of your target market, and find the best platform to sell your products.
Best of luck!