Over the past 25+ years, we have seen just about every type of load imaginable. We have seen tool truckloads, general merchandise truckloads, domestics truckloads and more! Perhaps more importantly than that, we have seen all of these liquidation truckloads in varying conditions. Not all liquidation truckloads are the same. For example, we carry manifested general merchandise truckloads that contain a lot of clearance merchandise along with shelf-pulls, overstocks and returns. A truckload like this typically has a much smaller percentage of damage and throwaway than a truckload that is entirely made up of customer returns.
There is a common thread with all liquidation truckloads though. All liquidation truckloads have a mystery value to them. Some truckloads are considered to be “better” than others. But the truth is, if you understand liquidation, you can make money in most cases even with a “bad” truckload.
The key is learning how to see past the “bad” or undesirable merchandise. It may be that you have a higher percentage of damage or throwaway, or perhaps you received more seasonal merchandise than you expected. You can usually still make money with the truckload if you maintain the proper focus.
Seasonal merchandise can always be put aside until that season rolls around again. Doing this allows you to be one of the first stores in your area to feature in-season products. Yes, this does mean you may have to hold on to it for a period of time, but the ability to make money still exists. Some off-priced retailers even offer “off-season” products at a discount. A Christmas sale in August for example…. you would be surprised to see how many people will take advantage of opportunity buys!
Typically, a liquidation truckload could have up to 25% in damage or throwaway. Let’s say it is 25%….. consider these numbers:
A load with $65,000 in retail value would cost you around $7,150. With an average freight rate of $1,500, your landed cost of goods would be $8,650.00.
If 25% of your load was “bad” – You would still have $48,750 in retail to sell ($65,000 minus $16,250).
If you sold the “good” merchandise at 1/2 price, you would collect $24,375 for a load that you only have $8,650 in! That’s a profit of $15,725 – nearly 65% gross margin!
It’s easy to see past the “bad” merchandise when you are staring at margins like this!
While every load is different, experience has shown these calculations to be an honest assessment of what you could experience when buying and selling liquidated merchandise!