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3 Tips When Buying from Liquidators and Closeout Companies

In today’s marketplace there are many great buying opportunities for those opening a dollar store.  The sad consequence of so many business closures and so much downsizing is liquidators and closeout companies now have almost every type of dollar store merchandise imaginable just waiting for a reseller to purchase.  In most cases these items sell for mere pennies on the dollar.  This makes them a great bargain for you as the dollar store owner.  It also creates a means for you to offer outstanding bargains to your customers.

However there are some downsides to purchasing your dollar store merchandise from liquidators and closeout companies.  When opening a dollar store it is important to recognize these downsides. You can then factor them into the dollar store merchandise buying decision to make sure you have a true win-win situation before proceeding.

#1) Plan for extra labor expense.  When opening a dollar store you will soon learn this is a cost of purchasing this type of merchandise.  Rather than shipping these items to you in individual cases, you should expect to receive totes filled with mixed items of all types.  There will be added time and labor to sort through each tote to gain a clear understanding of exactly what you received.

#2) Expect some damaged merchandise to be included.  Be very careful what you are buying on the secondary market.  Make sure it is crystal clear whether you are buying customer returns, damaged merchandise, shelf pulls or overstocks.  Even if you purchase new, overstock merchandise, the act of individually throwing everything together into a huge tote can do damage.  A portion of your labor for sorting through each tote is to locate and remove merchandise that is damaged and will either need a deep discount, or possibly cannot be sold at all.

#3) Don’t expect to receive the exact quantities of merchandise you would prefer.  If you are opening a dollar store you’d probably prefer to buy your dollar store merchandise is specific quantities.  For example you might want to open your store with 12-each of the 10 most popular 3” pillar candle colors.  Yet buying through closeout and liquidation companies generally does not allow this.  There might be 3-each of the top 4 colors, and then 137-each of the least popular colors as a part of the mix.  This creates a likely overstock situation for less popular selling colors and a need to locate and purchase more of the top sellers.  Factor this into the equation when making a buying decision.  Don’t forget to consider selling some of the excess to other discounters as a quick means of recovering your money.  That solution may allow you to make a purchase that is filled with many other gems that your customers will eagerly purchase as soon as they hit the sales floor.

To your dollar store success!

About the Author

Learn how you can Start your own Dollar Store Business.
Bob Hamilton is an entrepreneur, author, writer, business consultant and trainer.

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