Colette: Today weíre taking a closer look at what resellers should look for when sourcing liquidated merchandise with Chad Maslak, President of Surplus2Profits.com.
Colette: Chad, just before the break you had mentioned a few times about using liquidated products to sell on eBay. How would you say that is for selling on eBay?
Chad: I believe itís a great option for eBay sellers because thereís a high potential for a high profit margin. This type of product is going to help people become more competitive with sellers who are selling already at extremely low prices. So itís also easy to create a backend and upsell process with these types of products as well.
Colette: So letís assume someone wants to sell surplus items using online auctions or just starting out selling on eBay, but they have a limited budget. There are many sellers out there like that. What can you tell someone about the price ranges they might want to expect when theyíre getting into purchasing surplus products and are there any tips or advice you can provide to make this work even easier on a shoestring budget?
Chad: Sure. It all depends on what you want to do and what product category you plan on purchasing in. As far as the price range, it all depends on the product category youíre purchasing in, as there are many product categories, as we mentioned earlier. Different product categories have different price percentages from different stores and they can vary depending on the store that youíre purchasing from. If youíre not buying direct from the stores, then the prices can be inflated anywhere from 3% to 20% depending on who youíre dealing with because youíll be paying the surplus dealerís markup so he can make money. So it also depends on the market of the products as well. So for starting on a shoestring budget, tips and advice would be to start slow and start low. Have a plan to know what it is you want to do, know how to buy it correctly, know how youíre going to sell it, and then do it quickly, and roll any and all profits into the next pallet or load, and continue to do so until youíre at a point where you want to be. It can be done if itís done right, just, I recommend that you make sure that you have a plan to do it.
Colette: So when you say, direct from the source in regards to liquidation, you say make sure local liquidators, Worldwide Brands also, we do a lot of verifying and qualifying liquidators before we place them into OneSource, you have to ask those right questions.
Chad: Right, absolutely. When I say direct from the source, so I can clarify, what I mean is there are a lot of surplus and liquidation dealers who purchase from the major reclamation or distribution centers that the major retail store chains will sell their overstock or closeout or returned products and their surplus and liquidated products too. Those stores will in turn resell those items to the end consumer on the secondary market which would be me or you or whomever would like to sell them on eBay. Now, instead of going to the surplus and liquidated dealer, many times what people donít understand is they have the opportunity to also purchase direct from the major reclamation center.
Colette: Very key point. Itís always, having that best relationship direct with the source is going to be the best for your profit margin.
Colette: How should someone go about sourcing surplus and liquidated products, then?
Chad: Any time youíre considering purchasing a pallet or bulk load itís essential to know what types of product and category youíre interested in purchasing. Maybe someone is interested in toys, maybe itís baby items or electronics. I wouldnít recommend the flea market approach. If it looks like you can buy it cheap and resell it, a lot of times people will say, well, Iím going to go do that. Well, you want to know whether you can sell the product and who makes up the market that youíre trying to sell to. As I keep saying, have a plan to make a profit, if someone wants to buy a couple pallets here and there and make some extra money, then the flea market approach may work. But if you really want to build a business with buying bulk pallets and bulk merchandise to resell, then itís very important to know the different types of product categories, what the different types of products there are from the various store chains, and what kind of products come in each specific category. And itís important to know the prices and the percentage of that product and that load. So itís always good to know what the market is bearing for the products in each of those categories. Now, people donít have to know every little detail as that would be impossible, but you want to know as much as you can about each of the product markets that youíre considering.
Colette: And definitely with liquidation and surplus, sometimes you can only buy a pallet that is a variety of products in that particular category. So you canít just go to liquidation expecting to get this one particular product, youíre going to get a multitude of products. It is time for a quick break. We have a lot more to talk about with Chad Maslak when we return. Go to ProductSourcingShow.com to listen to any of our past shows, read written transcripts, and more. Iím Colette Marshall. Weíll right back with Chad Maslak of Surplus2Profits.com.