Buying overstock and liquidation grocery items can be good for your bottom line, but you need to know how to do it. Many of our buyers who purchase grocery lots built their business specializing in reselling grocery liquidation. In this article, we will outline the best practices and things to consider when it comes to buying and reselling liquidation grocery items. We will highlight:
- Types of items and conditions
- Benefits for buyers
- Things to consider
- Tips to get started
What is grocery liquidation?
Sourcing grocery liquidation to resell is a little bit of a different game than some of our other categories like consumer electronics, apparel, or home and garden goods. Why? Mostly because food items have sell-by dates!
The majority of the inventory you will see on our grocery marketplaces consists of shelf-stable merchandise like canned goods, snack foods, pet items, and beverages. Mixed into the grocery category you will also find things like cleaning supplies, paper goods, resealable plastic bags, and other sundries for everyday use. Occasionally you will see an entire lot made up of frozen food items that will require a refrigerated truck for shipment. What you won’t find is inventory like produce, meat, or dairy.Browse Grocery Auctions
What condition can I expect?
A majority of the grocery category is made up of pure overstock inventory. This is usually due to a retailer overbuying merchandise. Rather than having these items take up space sitting in a warehouse, they resell them into the secondary market.
Customer returned grocery items may sound a little strange, but it happens! And in most cases, it’s usually due to buyer’s remorse or purchasing the wrong item. Customer returned goods include unopened or open items, meaning the retail package may be opened or damaged but the internal contents are still intact.
Another popular condition found in the grocery liquidation is shelf pulls. Whether it’s 30 days or six months before the manufacturer’s sell-by date, retailers pull this inventory off their primary shelves and move it into the secondary market.
Benefits for buyers
Buying liquidated grocery items offers the potential for larger profit margins than purchasing goods through a wholesaler. And in the grocery industry where margins are usually thin, by purchasing liquidation grocery, B-Stock buyers have the added advantage of larger margins.
Having access to top grocery retailers is a huge win! Becoming an approved direct buyer in this industry is usually difficult. Buying through B-Stock allows you direct access without a middleman. This reduces the risk of cherry-picking (skimming the goods and taking the high quality and high-value merchandise out of the lots before getting to you), therefore, creating a great sourcing opportunity.
Things to consider
Limited Distribution Channels
It’s important to understand what your distribution channel options are in order to resell food. When reselling grocery items and sundries, there are some common channels our buyers use. For example, many resell their inventory in small discount grocery stores, convenience stores, dollar stores, flea markets, vending machines, and more. Additionally, many buyers export these goods when purchasing from retailers that allow it. However, the limited reselling channels are why many of our buyers purchasing these goods specialize in just grocery.
Grocery buyers usually factor in a certain percentage for loss due to expired items when calculating the bidding amount, potential profits, shipping charges, etc. If items are not expired but close to the sell-by date, it’s important to think about how fast you’ll be able to receive and move the inventory. If you receive items that are past the sell-by date, you’ll be responsible for disposing of them properly. Seasoned grocery buyers usually account for a small percentage of shrinkage per liquidated lot.
Understand the nature of the products you’re purchasing and if any special shipping arrangements will be needed. In the case of frozen food item auction lots, a refrigerated truck will be required for shipment. Think about your location and the season. It would be fine to receive a pallet of chocolates in Detroit in the winter but during a Phoenix summer? Not so much.
Unlike overstock inventory (which is brand new, retail-ready, and neatly stacked and wrapped), an auction lot of shelf pulls or customer returned goods can require more time and organization to unpack. For instance, these lots can have items packed into crates that are stacked on the pallet or sometimes goods are all together in one large Gaylord box. With grocery liquidation lots, you tend to get more individual units than in other categories with larger items.
Best practices for buying grocery liquidation
Read up on who and where the inventory is coming from. Will there be special shipping requirements? Does this seller have a good reputation? Is there potential for expired or past sell-by items? Also, feel free to ask us questions! Our amazing Customer Support team is always here to help.
The manifests accompanied with each lot are the best way to know what’s included, even before you place a bid. A handful of grocery retailers will include exact dates or estimates on when items will approach their sell-by dates. This helps you understand how long you have to move the inventory and calculate any potential loss. For more information on understanding manifests, read our article Buying Basics: All About Manifests.
Start with Small Lots
When you first start reselling groceries, it’s always good practice to start small. You’ll want to see how successful you can be, how fast you’re able to move the merchandise, and how much profit you’ll ultimately make. Take advantage of smaller lots and the opportunity to purchase pallets.
Research the location of the distribution centers prior to bidding. When you’re closer to the warehouse it will be cheaper for you to receive product — saving on shipping costs. Additionally, the closer it is to you, the fewer touchpoints the lot will encounter, minimizing shipping risk such as damage, loss, spoilage, etc.
Do Some Math
Some grocery retailers will include shrinkage in the lots while others will not. Meaning, a select few retailers will only sell 100% resaleable items. If you’re just beginning you may want to consider purchasing lots from only these retailers. Number one, you won’t have to worry about disposing of potentially expired or damaged items; and two, you won’t have to assume a certain percentage of guaranteed loss per lot.
Check out all the live grocery auctions to begin your grocery liquidation buying journey today!View Grocery Auctions