If you’re not familiar with the idea of overstock, you’re not alone. Department stores like Walmart, Target, Macy’s, and JCPenney purchase inventory based on predictions of what will sell in a given season. If a product doesn’t sell as well as they had hoped, they often have quite a lot left over at the end of the season. These products are still brand new and in perfect condition, but the store has to get rid of them in order to make room for the next season’s products. Many retailers liquidate their overstock inventory in bulk auctions, selling pallets or even truckloads of quality products at deep discounts. Resellers buy these overstock items for pennies on the dollar and then sell them at a mark-up, creating a profitable business and great deals for their buyers.
Reselling overstock inventory has become a bit trendy lately. The truth is, it’s a great way to create a business from the ground up. You can find overstock and liquidation merchandise from all of your favorite brands and retailers, including those big-name department stores. Then you can sell these items at various online marketplaces, in your own eCommerce shop, or in a local storefront if you prefer. But you may be asking, where can I buy overstock merchandise? How does the whole overstock process work? There are seven steps to create a successful overstock reseller business. We’ll walk you through the whole process.
The first step to becoming an overstock reseller is to decide what your reseller business is going to look like. There are many things to consider including the type of inventory you will sell, where you’ll sell it, and how you’ll deliver it to your customers.
The first consideration, and often the most fun, is to decide what you’ll sell. You can find overstock merchandise of just about any type of category. You could choose to sell last season’s fashion finds, home goods, garden products, kids’ toys, or even jewelry. Each type of product comes with its own market and its own unique selling challenges too. Be sure to carefully think through the entire process including how you’ll store your merchandise and how you’ll ship it too.
Next, you’ll want to figure out where you’ll sell your products. Many resellers use online marketplaces like Ebay or Amazon. These are convenient and simple to start up, with less overhead than traditional stores. On the other hand, some resellers choose to sell in local consignment stores or even by opening a storefront of their own. If you’re selling large products like furniture or appliances, this might be the way to go.
Once you have a plan for what you’re selling and where, you’ll need to figure out how you’re going to store your inventory. Find a suitable location for a warehouse, depending on the volume of inventory you plan to handle. You’ll likely want somewhere with a loading dock and access to a forklift so that you don’t have to pay extra for lift gate services.
Finally, figure out how you’re going to get your products into the hands of customers. If you’re going the storefront route, this will likely take care of itself. If you’re selling online, look into the various shipping options and determine which will work best for you.
Once you’ve decided what you want to sell and how you’ll need to figure out where to buy overstock pallets. This step is vitally important because if you don’t do your research, you could get taken by some of the bad actors out there. Be sure that you’re buying directly from the inventory source. The fewer steps the merchandise takes between the department store’s warehouse and your business, the fewer markups you’ll have to pay. Additionally, you reduce the potential risk of purchasing lots that have already been stripped of their most valuable products when purchasing from an unknown source or a third party reseller.
B-Stock has a wide range of overstock and liquidation auctions from your favorite big-name retailers and brands. Nine of the top 10 U.S. retailers use B-Stock to sell their name brand merchandise directly to qualified business buyers with no markups and middlemen. Our auctions include detailed listings with all the information you need to make an informed buying decision. And our support team is always here to help if you have questions or problems.
Once you have a business plan, it’s time to make things official. Register your business name and get started on all the associated paperwork. In order to bid on overstock inventory from major auction sites, you’ll need a resale certificate. You can get this from your state when you register to collect sales tax. For international buyers, check out our international buyer guide for more details.
In addition to filing paperwork, you’ll also want to set up a business bank account to handle income and expenses. You’ll want to create a seller account with your chosen online marketplace, lockdown that warehouse space you decided on in step one, and set up an account with your chosen shipping partner. Finally, create an account with the auction marketplace you chose in step two and submit all of the proper paperwork to them.
Once the paperwork is done and you’ve registered for an account with your overstock auction marketplace of choice, it’s time to buy overstock items. Bidding on auction lots can be exciting, but try not to let your enthusiasm get the best of you. You want to carefully look over each lot before bidding, considering the items for sale and the profit you’re likely to make. Be sure to take into account storage, shipping, and packaging costs. Set well-informed limits for your bids on each auction and then stick to them.
There are a number of bidding strategies that auction buyers may make use of in their pursuit of the best possible price for their goods. It may be best to wait until the last minute to bid, to keep from drawing attention to the lot or prematurely inflating the price. Some suggest that avoiding round bid numbers is a good idea, as adding a few dollars or cents may push the lot past someone else’s threshold without costing you too much. Research other strategies and take the time to find one that works for you.
Unlike purchasing a product on Ebay or Amazon, when you win an overstock or liquidation auction lot, shipping may not be prearranged. It will be your responsibility to contact a shipper and arrange for them to pick up and deliver your product. And we’re not just talking about UPS or FedEx.
For full truckload or less-than-truckload (LTL) auctions that state “buyer arranges shipping”, you may need to contact a logistics company. Be sure to read the fine print on any logistics arrangement as you may have to cover extra charges like the use of a lift gate or forklift. And be sure to only use a trusted source. The last thing you want is to pay hundreds or thousands of dollars for an overstock lot and then never receive it.
Once you’ve received your product, carefully inspect each item for any damage during the shipping process. Be sure to document any discrepancies you find between the product received and the shipping manifest.
Next, you’re going to need to list your product for sale. Look into best practices for writing product descriptions and ensure you’ve given potential buyers all the information they might want about the product you’re selling. Ideally, you don’t want buyers to have to reach out to you with questions because your listing has been crafted with plenty of details. Also, be sure to provide high-quality photographs showing all sides of your product. This is the face of your sale, so it’s worth taking the time to get it right.
Reselling overstock from department stores can be a rewarding and fun way to make money. Many resellers fall in love with the process and turn the business into their main source of income. As you get more familiar with the process you may choose to narrow your focus to a specific type of product that works best for you or broaden your inventory to include a variety of related categories.
No matter what strategy you plan to use, remember to have fun with it while keeping good business sense. Your new hobby may just become a full-time career.