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Wholesale vs. Liquidation: Which Is Better for Your Business?

Wholesale liquidation is the bulk purchase of clearance or liquidation products in order to boost your company’s profit margins. The majority of retailers’ reverse logistics strategies now include liquidation. Retailers can recover some of their losses, such as those on out-of-season inventory, by liquidating products to free up warehouse space and make room for new inventory. Additionally, wholesale liquidators are driven by the large influx of customer refunds in today’s era, leading to large volumes of chargebacks for retailers.

The Difference Between Wholesale and Wholesale Liquidation Services

You have probably encountered the term wholesale if you have been reading about liquidation. Despite having comparable business strategies, wholesalers and liquidators function quite differently. A typical wholesaler will purchase a sizable bulk of liquidation items from a liquidator and then divide that lot into smaller parcels to sell to businesses for a predetermined wholesale price. These fragmented parcels are frequently bought by other, smaller wholesalers, who later increase the price of the lot by adding value and their own profit to it.

On the other hand, wholesale liquidation services involve a company that tries to make quick money by selling overstock, outdated items, or backorders. Retailers like Walmart, Target, Amazon, Best Buy, and eBay can sell their unwanted returns, overstock, and closeouts to resale shops through the online liquidation markets run by wholesale liquidators.

The Upside to Being a Wholesale Liquidator

  1. The Inventory Mix

With wholesale, you often make a single, large purchase of the same product in large quantities. Inventory for liquidations may consist of various products from a single product category or may be sold in mixed lots.

  1. The Quality of Products: Overstock, Closeouts, and Shelf-Pulls

As a retail businessman yourself, you should be aware that when you source your products through wholesale liquidation deals, you can get new branded goods at a relatively small portion of their standard retail price. This is because there’s no intermediary, so no intermediaries are looking over the merchandise before you when buying overstocks, closeouts, and shelf-pulls. The quality of these goods is highly desirable as compared to customer refund deals in the liquidation inventory. On the other hand, while the wholesaler offers guaranteed brand-new tagged goods, the items are at full retail prices with a small bulk discount compared to the rates liquidated inventory offers, which is value for money.

  1. Cost Benefits

The cost-effectiveness of purchasing liquidation goods makes them ideal for starting a liquidation resale business, implying that you can manage your risk exposure as a wholesale liquidator. Moreover, wholesale liquidators often allow you to negotiate the prices for inventories compared to wholesalers who sell at fixed rates.

Contact us to learn more about our wholesale liquidation services or if you would like to avail yourself of the benefits of a wholesale liquidator in Canada.

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