What Are Overstock Auctions?

Have you ever asked yourself what retailers do with merchandise that doesn’t sell? Well, that’s overstock inventory! So, overstock inventory is inventory that was not able to sell within an efficient amount of time at the retail locations. But that’s not the full story! These items have never been purchased by a customer, and therefore, are not returns and should not be defective. However, this can be a headache for retailers. Just think, when the supply exceeds demand, what happens? Companies are faced with a loss. Whether this was the result of over-delivery, lackluster sales, or poor management of stock, it’s usually inevitable.

And for business-minded buyers like yourself (you were wondering where this inventory ends up, right?) this can actually be a good thing. Yes, there are opportunities to be had with customer returns and even damaged inventory, but there are a few benefits that set overstock auctions apart. We’ll dive into those shortly!

What are overstock auctions?

Overstock auctions happen when retailers decide to put up their unsold merchandise on online platforms like the ones B-Stock operates. Since inventory would otherwise take up warehouse space, retailers opt to make way for new inventory. The process of liquidating is simply a way for them to recoup some losses on that unsold inventory.

If you’re a business buyer looking for inventory, overstock auctions are a great place to start your search. There are a few reasons for that:

1. It’s never been sold before and therefore in new condition
2. You are purchasing directly from the source
3. Overstock inventory is sold for pennies on the dollar
4. Auction format means you only pay what you want
5. Less time spent cleaning or fixing up items before reselling
6. Original packaging

And if you’re simply looking for a new business opportunity, it’s easy to start participating in overstock auctions! Novice to experienced resellers follow the same general formula. Purchase overstock inventory at low prices and sell it for slightly less than the retail price. That way, they’re still earning a profit while giving customers a good deal.

How to find overstock auctions

We’ll give you the ins and outs of an overstock auction so you can take notes! This is your roadmap for finding and purchasing overstock merchandise via overstock auctions:

Research best liquidation auction sites

There are a plethora of online liquidation sites that include overstock auctions to choose from. You want to make sure you are getting the best price without the middleman markups. If these companies and buying overstock from retailers in bulk and breaking it up to sell to business buyers like you, you’re likely not going to get the best deal. In the past, this used to be the only way overstock was accessible. But luckily, overstock auctions have migrated online. You get full transparency and never pay more than you want—at least that’s how B-Stock works.

Buy pallets of merchandise by store

If you have a specific store in mind, you can probably find pallets of their overstock. Whether items didn’t sell during that particular season, a retailer over purchased, or inventory got pulled from shelves, this is still unpurchased inventory up for grabs. Everyone liquidates. You can have your pick at the brands you know and love.

Maybe you have customers interested in designer apparel. Well, there’s plenty of overstock auctions to choose from! You can buy overstock from department stores with name-brand apparel, accessories, and footwear your customers recognize. Tags and all! Head over to 7 Steps to Buy Overstock Items from Department Stores for more information.

Luckily, B-Stock operates nine of the top 10 U.S. retailers’ online liquidation marketplaces. That means all that overstock inventory is available for registered business buyers to buy directly from retailers!

Pick a category (or not)

It can help narrow your search if you start with a category. This also gives you the added advantage of knowing the space a bit better. For example, if you’re a self-proclaimed sneakerhead, it can help to know about the industry, when new styles are typically scheduled to drop, what limited edition shoes to look out for on resale sites, and more.

Just about any retailer you shop online or in stores has to deal with overstock inventory; rest assured, there is a category for everyone! Consider the following:

• Furniture
• Home & garden
• Apparel
• Consumer electronics
• Health & beauty
• Toys & baby items

There are always factors to consider depending on your customer base and where you plan to sell your overstock inventory.

Don’t forget to check other types of auctions

We also mentioned earlier that there are different inventory types like returns and salvage. With the rate of in-store and online returns growing, you can potentially acquire even more inventory! Of course, buying customer returns comes with its own set of challenges. Retailers have different return policies and it’s safe to say, not all returns are created equal. But, part of the fun is finding those returns that are still perfectly functional or even unopened! Learn Why DOT COM Returns Are Worth a Second Look and branch out into some other auctions while you’re at it. But if you want to stick with new inventory, you can filter for new condition auctions on the auctions page.

How overstock auctions work

Submit a resale certificate

Before you can do any bidding, you will need a resale certificate. What this does is allow you to buy goods through your business without paying local sales tax at the time of purchase. It’s then your responsibility to collect the tax from your customer when you sell the item. It benefits your business by allowing you to avoid sales tax and pass those savings on to your customer. B-Stock requires a valid resale certificate upon registration to prove you are a registered business buyer and intend to resell overstock inventory.

Look out for important auction details

Auction titles should contain all the information you will need at a glance. Emphasis on glance! You can see the product type, brand, number of units, condition, estimated retail value, and where it is being sold from. You should still always read through the auction manifest carefully to make your bidding calculations.

Bidding

Research what the market value is for the overstock items and set a budget. You have to account for what the current going rate is, buyer’s premium fees (a standard auctioneering fee on some sites), shipping costs, and any selling fees you may incur on sites like Amazon or eBay. Also, consider the cost per unit and what profit margins you’re after. Once you do, you can place your max bid and let proxy bidding do the work for you! The system will automatically bid incrementally on your behalf so you don’t have to keep checking your bid while the auction is live.

Note: Just because you enter your maximum amount doesn’t mean that’s the final price you’ll pay. The final cost is based on the maximum amount the second place bidder would pay plus one increment higher.

Remember, since this inventory is brand new, you’re going to get a higher return on your investment. If you have confidence in the price you can sell an item for, this should influence how much you’re willing to pay when purchasing overstock.

Shipping

Shipping is a big component of your budget. You want to properly allocate the funds for this as it can vary depending on the region and distance. The more miles it must travel, the more it will cost to ship. But don’t worry, there are ways to save on shipping costs! You can choose to consolidate shipping or look for warehouses shipping auctions the nearest to you.

Even product category requires some shipping consideration. For example, will it be floor-loaded? Nearly all appliance auctions (because they are bulky) are floor loaded – meaning, the inventory will not be shipped on pallets. Will you need to pay extra for a lift gate (the device used to raise and lower items from ground level to the level of a tractor-trailer)? Do you need an extra hand receiving and unloading shipments? These are all things you can think through ahead of time in order to avoid any hiccups.

Sorting and storing your overstock

Once you get your hands on overstock inventory, there’s the matter of sorting and storing it. The auction lot manifest will come in handy here. Ensure that you’ve received everything, tested all units (if applicable), and start sorting. If it’s not working, be sure to separate it from your other inventory. Itemize and catalog everything in the manifest — which can easily be turned into an inventory spreadsheet. If you want to upgrade your inventory system, scan barcode labels and track inventory through apps like Sortly.

Depending on how big the shipment of overstock auction is, you have a couple of storage options. Installing racks and shelving is a wise investment if you plan to keep your operation going on the side or for the long term. You can use clear storage bins with labels so that things stay organized. Don’t stack bins or boxes too high, and always place heavier items on the floor and lighter items on the top. Renting a storage unit can also help alleviate space issues.

Buy overstock inventory on B-Stock

At the end of the day, overstock auctions are a worthwhile investment for your business. It’s accessible, cost-effective, and easy to turn around. Shop B-Stock marketplaces for all your overstock inventory needs. Whether you’re looking for a new source of inventory, or simply want to dabble in a side hustle, reselling overstock is a good beat. You can easily become a B-Stock buyer and start your reselling journey in no time!