There is often confusion on how liquidation and wholesale differ (or if they do at all). In fact, there is a huge difference between the two. In this article we’ll provide an overview of both liquidation and wholesale.
Liquidation typically means an organization is trying to turn excess, overstock, or obsolete goods into cash, quickly. For retailers, this merchandise costs money because 1) the goods depreciate with age, 2) they take up space in the warehouse, and 3) they tie up capital. Most retailers will end up selling – aka liquidating – 95 percent of this excess inventory on the secondary market.
Historically, large retailers and manufacturers have sold this liquidation inventory in bulk (and at a loss) through negotiated transactions with a handful of buyers. These sales are generally at prices well below retail MSRP. Over the past few years, however, a shift has taken place. Many retailers are bypassing traditional liquidation methods and incorporating technology-based programs for excess inventory into their overall business plan. This includes working with B-Stock to launch customized B2B online auction marketplaces that connect returned and excess merchandise directly to business buyers. This creates a level playing field for all buyers, big and small, to compete for the inventory. Why? Because liquidation buyers now have access to highly discounted inventory that they were previously unable to buy without a middleman. What’s more, the inventory is generally listed at a fraction of MSRP.
Now, wholesale. Wholesale is the sale of goods and merchandise to resellers and businesses. The wholesale price is usually fixed and the amount of product can vary substantially. The goods are usually sold – by the wholesaler – in bulk quantities with the intention of being resold by the purchaser. Something else to note: true wholesaling is generally not available to the standard consumer.
Wholesalers frequently purchase large liquidation bulk lots from large liquidators, break those lots apart, and then repack and redistribute them in smaller lots to smaller retailers and resellers. Often by the time the smaller retailer or reseller gets it, the merchandise has been through multiple middlemen and price mark ups.
B-Stock Sourcing is the largest network of B2B liquidation marketplaces connecting returned and overstock inventory from top retailers and manufacturers – including nine of the top 10 U.S. retailers – directly to business buyers. Resellers can bid on a few pallets to multiple truckloads of inventory across dozens of categories including: consumer electronics, mobile, fashion, home décor, appliances and more.