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Amazon Liquidation: How to make serious money?

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Amazon Liquidation: How to make serious money?

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Amazon Liquidation: How to make serious money?

28 Jul, 2020

You have built up your online Amazon selling business over time, use the best amazon seller tools and you’re now enjoying the fruits of your labour, running a successful selling entrepreneurship by selling products you have sourced from a variety of different places.

But have you considered selling products on Amazon from liquidated Amazon stock? Re-selling, as it were, as these are products which have been returned to Amazon for one reason or another, and now are given the chance at another life in the form of being sold as part of a pallet of liquidized Amazon stock.

If you didn’t know about this method of sourcing products to sell on Amazon before, it may be worth your while considering it as a viable way of making even more money on Amazon’s Marketplace. This article explores the theory behind Amazon liquidation pallets, the how, the why, and how you too can get involved, if you so wish to. 

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Amazon Liquidation Pallets

So how do products end up on Amazon liquidation pallets? 

This happens when products are returned to Amazon by customers. And the vast majority of the time, these products are not faulty in any way. Because Amazon only allows free returns of goods if the items are faulty, consumers obviously choose this option quite a lot. If Amazon sellers only sell brand new, unopened items in their inventory, they aren’t able to put them up for sale again. 

These products get consolidated in warehouses into liquidation packs. From there, these liquidation pallets are sold on to liquidation distributors, some of which are:

  • Liquidation.com
  • BULQ
  • Direct Liquidation 
  • BritDeals
  • Gem Wholesale
  • i-bidder.com
  • BlueLots
  • 888 Lots
  • Wholesale Clearance UK
  • B-Stock

In these liquidation pallets, it is often the case that they contain brand new, fully operational, profit-friendly items. Items which you can re-sell in your Amazon selling business. And there is a deal to be done with these liquidation pallets.

Liquidation Distributors

So let’s look at how these liquidation distributors work, and how you can get involved with this scheme.

Direct Liquidation

Website: https://www.directliquidation.com/

An auction-based website, Direct Liquidation gives Amazon merchants the opportunity to make an offer on liquidation pallets. Direct Liquidation offer goods that are “retailer ready”, and that have already been sorted, tested and re-packaged before you receive the pallets. 

With Direct Liquidation, you have the choice of organizing your own shipping for the pallets, or they can take care of this for you. You can enjoy a 90-day warranty on any refurbished products/pallets that you purchase from Direct Liquidation, ensuring peace of mind.

BULQ

Website: https://www.bulq.com/

Trading since 2004, BULQ trades in overstock in every goods category you can think of, so you can tailor your search to only seek out produce that falls into the categories your business tends to operate in.

Boasting new products twice a day, BULQ has a guarantee that all pallets come complete inventory information, including the branded name, category, UPC, and the number of units. BULQ operate via auction methods, as well as fixed price product pallets. 

You cannot spend more than $10,000 on any given day via this website, however this limit does not include shipping and processing fees, or taxes). BULQ’s delivery charges are typically $200 for each pallet delivered, and for anything much larger, you need to take responsibility for the shipping thereof. 

BoxFox

Website: https://boxfox.co/

BoxFox is a little different to the two aforementioned liquidation distributors, as they only handle brand new products, and not Amazon customer returns.

Working on a bid system, you bid on a lot that you are interested in, with an auction being live for three days. You are given full product details of the lot, including product images, ratings, and features to assist you to work out the profits you can expect to receive. 

Other ways to buy liquidation stock to resell

As well as checking out some of the online liquidation distributors, you can of course check locally, as you may find warehouses close to you that also have product pallets to sell you. The benefits of this would be that you can see first-hand the quality of the stock, and have the knowledge that you know exactly what you are buying, unlike online. You also have the opportunity to negotiate with the warehouse, which can be easier to do in a real-life scenario, unlike online. 

You could potentially save a lot of money on shipping the pallets if you manage to secure a local warehouse deal, by simply renting a van and loading it yourself. Bear in mind that before you get carried away buying hundreds of pallets that you will need a fair amount of storage for your new inventory, and also the space to sift through the pallets and sort the products to catalogue them. 

Liquidating your own Amazon inventory is something you can of course consider if you find yourself with a surplus of stock. This happens due to several reasons:

  1. Initial overstocking of a product line
  2. A product line that doesn’t sell as quickly as you had hoped, and you need to free some space and capital
  3. You want to diversify from the product ranges you initially ventured into

Selling your surplus Amazon stock doesn’t require much in the way of effort. Liquidation Distributors have established interfaces for selling and buying stock, and they aren’t short of buyers for liquidized stock. 

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Potential problems when purchasing liquidation stock

Here we look at some of the outcomes you want to avoid when buying liquidation pallets from liquidation distributors. 

  • You may purchase liquidation pallets that include broken or faulty products
  • Product packaging may require re-packaging if they have been sitting around getting dusty for years!

Which questions should you ask liquidation distributors?

Be vigilant when negotiating with a liquidation distributor, and go through the following checklist:

  • How does it work - are the prices flat, flexible or sold by auction?
  • Is there a requirement to register with them before buying anything?
  • Is there a requirement of a resale certificate?
  • Are there any limitations in place for purchasing amounts? 
  • What kind of product information is included in the manifests? 
  • Which shipping options do they offer, and can you arrange your own shipping? 
  • What is their rules and regulations surrounding the situation if the products don’t compare with the manifest information?

A side note regarding dealing with a liquidation distributor – when you take receipt of your purchased liquidation stock, a fair amount of time will be required in order to sort through the stock, categorize it, take photos, and make sure the goods are in a condition which is suitable for resale. 

Is there a way to maximize profits through liquidated stock?

There certainly is. And you would be wise to navigate carefully when negotiating with a liquidation distributor, as it’s very easy to spend a lot of capital on a lot of stock, only to find out it's not what you were expecting, and therefore losing a lot of money in the process. Some top tips to maximize your profits are as follows:

  • Obtain a Resale certificate (very often a requirement from liquidation distributor businesses)
  • Carefully scrutinize the manifest and obtain as much detail as possible about your shipments 
  • Be aware of manifest differences – if you end up with liquidation pallets that are wildly different from the original manifest, you have cause for complaint, and potentially, your money back
  • Liquidation stock requires a lot of time to sort and categorize, so factor this time into your costs
  • Understand the liquidation distributors’ grading system. Once you’ve worked with a liquidation company a while, you will have a feel for the quality and features of the products
  • Check dates for expiration of products
  • Don’t throw all your capital at liquidation stock instantly. It’s best to build up, investing in small amounts of liquidation stock at a time, until you can be confident with your liquidation distributor and the quality/types of products you can expect to receive

Starting a liquidation business

Starting down the road of buying liquidated stock means you take these steps:

  1. Find a liquidation distributor who you feel you can have a good working relationship with – there are plenty of reviews online about these companies, so definitely check them before placing any orders and committing with your capital
  2. Once received, sort your inventory and categorise your products accordingly
  3. Get the goods on Amazon to start selling them!

Sorting your liquidation stock

This is a process that does require a lot of time, but if time is on your side, and you are organized, you can simply follow the process each time you take delivery of new liquidation stock. It’ll be a well oiled machine in no time!

Check if the goods are:

  • Discontinued
  • In good, sellable condition
  • Packaged in good, sellable condition
  • An authentic brand (if that’s what you were expecting)
  • Included with a warranty

Sort through the stock, and set aside those goods which do not meet your criteria for re-sell on Amazon. If they are broken, faulty, or need re-packaging, sort accordingly and categorize.

Selling your liquidation stock

Next up, selling the stock you have purchased.

You may want to consider setting up your own Amazon Store. 

Amazon Stores were launched back in 2017, and Amazon allows you to create your own brand by way of an Amazon store. By doing this, you can increase your sales because your brand is getting much more traction and visibility on the platform. 

An Amazon store is a visually rich platform where you can showcase your products, and create a lovely shopping experience for your customers. Due to the nature of Amazon stores, by having one you automatically enhance your consumers’ shopping pleasure, and drive more sales, as it makes it even easier to buy from you, and therefore, your brand. 

This is done in a few ways:

  • Gives you a chance to get your brand out there to customers you haven’t reached before.
  • Gives your existing customers a new look at your brand, and to tempt them into buying from you again.
  • You can create slideshows of your products with images, text, and videos, and is wonderful for launching new products, and making a huge fuss about it!
  • Heightens your SERPs within Amazon in an organic manner. 

The primary factor that drives Amazon entrepreneurs to set up their own Amazon Store is to encourage more sales – sales with their existing customers, and sales with their brand-new customers. If you make your Amazon Store a really enticing place to be, and a pleasant shopping experience, more sales will come. It’s a very accessible method to shop, and one which shoppers enjoy – so why not go ahead and create that very platform for them to enjoy – and buy from you? 

Your Amazon Store is not restricted to desktops, either. The mobile shopping experience is second to none, so you can capture your prospective shoppers’ interest whether they are browsing your Amazon Store on their own computer, or mobile, or out and about. 

Benefits of an Amazon Store

  1. Easy to set up, with customizable templates for you to simply follow, and populate with your products.
  2. You don’t need to be a web developer! Setting up an Amazon Store does not require any coding knowledge or skill whatsoever. Bonus.
  3. Visually rich, Amazon Stores are a pleasant place for your customers to be – as they immerse themselves in your product images and videos.
  4. You can create more than one page of products, depending on your own unique business requirements. 
  5. Your Amazon Store can be tailored exactly to your own specifications, making it unique to your business brand, and to stand out from the rest of the competition. 
  6. You have the option of social sharing integration with your Amazon Store, to drive more engagement, traffic, traction to your products, and, of course, sales. 

An item page on an Amazon Store which converts, and converts astoundingly well, looks like this:

  • A thorough explanation of the item
  • Item pictures which are high-quality and professional (this includes videos, too)
  • Qualified for Amazon Prime and all its elements
  • An appealing title, which is also accurate and relevant to the item in the listing

By integrating this invaluable content on your item pages on your Amazon Store, you will be compensated by Amazon, as the result of this will be buyers who are networking with your page, and experiencing lower bounce rates. 

You can also integrate Shoppable Images. These images can be shown with lifestyle pictures, shown in locations that enable your shoppers to imagine how their chosen products will look, and spark their imagination. Your shoppers can click on these Shoppable Images , and they will be shown the basic product features and information, with the facility to then go onto the more detailed product page if they need further reassurance to go ahead and purchase said product. 

Another feature you can add to your pages are descriptive text with your product images. This allows you to give detailed, visual captions to your product images, highlighting benefits and uses of the product. This text also gives you a further chance to enhance your SEO from third-party search engines. 

Following these steps ensure that the chances of your shoppers staying on your Amazon Store longer is much, much higher. They will want to know more about your brand, and potentially other products you may be selling that they will want to buy while they are there. 

Once Amazon appreciates that your merchandise page description is correct, and reflective of the product, and the price is appropriate, conversions will happen. Yay. 

Before publishing your Amazon Store product pages, just do a triple check on the grammar and spelling to make sure your pages look as professional as possible. You can use Store Preview to check exactly how your desired pages are going to look to your buyers. 

Which products sell the best on Amazon?

On a side note here, it’s worth mentioning about Amazon best selling products. Because, after all, if you are going to go ahead and set up your own Amazon Store, you want to ensure you are including the very best-selling products, don’t you?

Amazon Best Sellers List

This list contains the categories on Amazon that sell the best at that present moment in time.

And this list is the best place to start when doing product research on best-selling products at any given moment in time. 

Best Amazon Selling Categories in 2020

  • Toys and Games
  • Cameras
  • Electronics
  • Video Games
  • Cosmetics
  • Books

Handy Tips to Sell on Amazon

As a great starting point, take note of these below tips for sourcing your next best seller, as, chances are – if your intended product fits all (or some) of these criteria, you may well have a star buy on your hands!

  1. The product has upwards of ten transactions in a day
  2. The product is eligible for Prime Shipping
  3. The product is small
  4. The product is light
  5. The product has an approximate selling price of $21-$200
  6. The product is simple to ship
  7. The product has fewer than 100 reviews already listed

Items you probably shouldn’t source to sell on Amazon

  1. The product is sold in great volumes every day
  2. The product is already sold in successful, branded stores
  3. The product is extremely heavy or bulky
  4. The product is complicated or costly (or both!) to distribute
  5. The product is already trademarked

Products to avoid re-selling on Amazon

  • Handbags
  • Luggage
  • Jewellery
  • Baby Products
  • Clothes
  • Beauty Products
  • Health Care Products and Medications

Amazon Sellers who Succeed on Amazon

It’s worth mentioning some products that sell particularly well on Amazon’s Marketplace. 

  • Unique/Bespoke Items

Amazon Sellers who craft their own jewellery, for example. These unique and bespoke items sell well as they are generally one-off items, which aren’t easy to replicate, and also have low competition from other sellers. Often you’ll find that these items can demand higher prices as there’s not often something similar on the market already = more profit!

  • Niche Items

Items which fall into a niche category are often successful, as it’s extremely unlikely that Amazon itself would start investing in these categories. Therefore, you probably wouldn’t have competition from Amazon with these niche items. 

  • Used Items

Refurbished or used goods have a lot of interaction on Amazon by shoppers. Shoppers who are driven by price, and not so much on delivery times. 

FAQ about Amazon Stores

How much does it cost to create an Amazon Store?

As long as you have an Amazon Professional Seller account already set up, and registered with Amazon Brand Registry, you are good to get started with your new Amazon Store completely free.

Are Amazon Stores just for desktops?

No. Amazon Stores can be viewed on desktops, Amazon mobile app, and also Amazon website. Amazon Store templates are built with a responsive model.

Does it take a long time to build an Amazon Store?

This is very much a loaded question, as it very much depends on how many products or items you have in your inventory currently, and the type of template you want to create. Bear in mind that once you have drafted your Amazon Store product pages, you will need to submit it to Amazon for absolute approval before it can go live. This process usually takes around 72 hours to be examined and accepted, so you can’t get going immediately with your Amazon Store. 

FAQ about liquidation stock

Can you list the items as new?

Nope. Even if the items don’t appear to have any damage or malfunction, they have been returned to Amazon at some point, and Amazon will reprimand you for attempting to sell items that are not actually brand-new. 

What are mystery pallets?

Mystery pallets are pallets with mysterious contents! You may receive information about which category these products are likely to come under. The rest is a mystery!

Often, mystery pallets are more competitively priced than manifested pallets, as the risk factor is much higher with mystery pallets. You could be unearthing a goldmine, but then again, you may be unearthing a pallet of broken items! 

Final Thoughts

The key message really when it comes to buying liquidation stock to resell on Amazon’s Marketplace is to start slow, and build from the ground up. Until you have confidence with your liquidation stock supplier, invest small and often, without risking too much capital up front. 

Get this process right, and you really could see your Amazon selling business reaching new heights – as your consumers get more and more deal-friendly. You can expect to be able to offer your customers really competitive prices for products that you sell on Amazon, when you invest correctly into Amazon liquidation stock. 

And if you find yourself in the situation where you need to sell some of your own stock to liquidation companies, it's not that your online selling business is set to fail! Every merchant makes errors here and there in terms of the right products to buy and sell, and seasonality can play a big part, too.

Learn from these errors, and become a better Amazon merchant as an outcome. 

Create a Business on Amazon with IO Scout

Find out how IO Scout can help you build a successful business on Amazon.

Get our Amazon Chrome Extension

With IO Scout Chrome Extension, you can instantly perform product analysis without any need to leave Amazon. Go ahead and find your bestseller!

Why Amazon Sellers Choose IO Scout vs Jungle Scout

Why Thousands of Sellers are Switching from Jungle Scout to IO Scout