Closeout merchandise, first quality goods that have reached the end of their shelf life, can offer flea market and swap meet vendors an opportunity to sell products at low prices and make big profits in the process. Reasons for liquidation vary, and may be that an owner is going out of business, changing product lines or needs to reduce surplus stock to make room for new merchandise. Liquidations can be particularly attractive because the products are generally sold at well under regular wholesale prices.
Saja Stark, executive sales manager of Discount Wholesalers Inc., launched in 1999, suggests flea market vendors preview goods before purchase. “We have a large showroom in Pennsylvania, and we let buyers look at the products before they buy them so there are no surprises. Vendors are able to look through a manifested list of pallets and pick one based on what is inside.”
Discount Wholesalers primarily sells shelf pulls and original case products that are made in the USA. Products come from grocery and drug stores, and include cosmetics, health and beauty products, household cleaners, general merchandise and small electronics. “We sell everything at a fraction of its original wholesale value. Being all clean and original cased goods, flea market vendors can charge less than normal retail prices and still double and even triple their investment,” Stark notes. “Most flea marketers buy a pallet or two, and we have pallets that start as low as $200.”
Stark suggests vendors do a little homework before buying a pallet of closeout merchandise. “They can look at the manifest, and then go and see what the products sell for so they know what they are getting into. A little research pays off in the end.”
Mixed pallets offer additional value
On the other hand, says Gary Bingham, owner of the Bargain Warehouse, vendors can benefit from not knowing exactly what is contained in a pallet. The company, launched in 1998, contracts with major department stores and sells name brand overstocks, closeouts and returns. Its products include electronics, clothing, and health and beauty products.
“When you buy a pallet from us, you get a mixture of new and returned merchandise,” Bingham explains. “We do not cherry pick out the good stuff and we stake our reputation on that. Our buyers get our products just the way they came in. Because I do not know exactly what is in the pallet, vendors pay pennies on the dollar.” Retail tags are often on the packages, he shares, and vendors will sell the items for about half of the ticket price, turning a large profit.
Bingham suggests flea marketers find a unique niche. “I tell my customers to find something they like to sell and specialize in that so they are not competing with the next guy. At the same time, they need to include variety within their niche to appeal to a broad range of shoppers. We carry different styles of pallets so vendors can get what they are looking for.”
Thousands of pallets are for sale every day at the company’s warehouse in Myrtle Beach, SC. “Many of our customers will vacation here with the family and pop into our warehouse to buy a pallet, and we will ship it to them,” Bingham continues. Alternatively, vendors can order online at the company’s website. The Bargain Warehouse offers buyers an up-to-date stock inventory by phone or email.
Jacobs Trading Company (JTC), launched in the 1960s, is another proponent of unopened pallets. “Since we do not know what is in those boxes, the gold that could be in there is passed right on to our customers,” Howard Grodnick, president of JTC, remarks. The company sells returned and excess merchandise, in every category, by the truckload. JTC’s parent company, Liquidity Services (LSI), operates Liquidation.com, an online marketplace where buyers can source surplus inventory by the truckload, pallet or small lot.
To get started in closeouts, Grodnick suggests that vendors develop relationships with several suppliers to find the best partners. He recommends the following buying guidelines.
1. If the liquidator has a physical location, visit the site.
2. Find out if the liquidator owns the merchandise or if it is brokering for someone else. If the company is representing another seller, it may not have inspected the products prior to sale.
3. Ask about any additional costs, such as freight charges or service fees.
4. Request references.
5. If the liquidator is online, look for current photos and product details.
6. Start out by buying a small amount of goods to test the waters.
Auctions are a hot buying trend
Auctions are another buying option that is gaining popularity among flea market vendors. D & M Specialties LLC, a wholesale supplier of brand name giftware for 25 years, holds live auctions in greater Kansas City, MO.
“We sell collectibles and brand name products to retailers, especially flea market vendors, from around the country,” says Daniel Mullen, owner. The company’s line includes Precious Moments, Boyds Bears and Fenton Art Glass, which sell very well at flea markets, he points out. “Vendors love to buy brand name giftware at low prices. They can make three to four times wholesale prices.” D & M Specialties also has a large offering of candles and Christmas products, such as ornaments, trees and wreaths.
Auctions are also very popular with D & M’s customers, Mullen states, in part because of the entertainment factor. “We have a friendly staff and offer refreshments. The atmosphere is light and fun.” Professional auctioneer Rick Fairfax moderates the events, which begin at 5 p.m. Upcoming auctions are scheduled for August 1 and October 3. Full pallets as well as individual pieces are available.
In addition, D & M Specialties’ wholesale warehouse is open Mondays and Tuesdays, from 9 a.m. to 4 p.m. It is also open on auction days, Mullen adds, and many people come early to purchase from the store and then go to the auction.
Closeouts, liquidations and auctions offer opportunities to buy first quality and returned merchandise at low cost. Vendors can turn a good profit if they work with trusted suppliers, research their markets to see what will sell, and at what price, and find their product niche.
For more information:
Discount Wholesalers Inc.
1985 Ticonderoga Blvd., Suite 27
Chester Springs, PA 19425
The Bargain Warehouse
5033 Dick Pond Rd.
Myrtle Beach, SC 29588
Jacobs Trading Company
8090 Excelsior Blvd.
Hopkins, MN 55343
D & M Specialties LLC
11917 E. 83rd St.
Raytown, MO 64138