Why “Warehouse scratch and dent” merchandise is a smart investment
Our industry is replete with defining terminology that is supposed to make it easier for people in the off-price / liquidation business to understand and purchase merchandise for resell. Probably the more common terms that you will hear include “Clearance” or “Shelf-Pulls”. But there is another term that people seem to bypass when they hear it, and the sad thing is, they are potentially missing out on a real money-maker! The term I am alluding to is “Warehouse scratch and dent”.
This category of merchandise holds huge profit potential because, in most cases, the merchandise has never even been in a retail store. Somewhere along the way, while still in the warehouse, somebody backed a forklift into a pallet, or accidentally knocked a pallet over. When this happens, the warehouse will go through the merchandise and throw away the items that are deemed too damaged to resell. Everything else is re-palletized and sold off as “Warehouse Scratch & Dent”. For the most part, these items are usually still in perfect or near perfect condition, however, the box may have sustained damage to the point that a normal retailer would not want to put this item on their shelf. But, if you are an off-price retail store, this could be the goldmine you have been looking for.
Sure, you pay a little more for these truckloads, but you also throw a lot less merchandise away on average. Because the loads are easier to process, you don’t have to spend as much money on labor to get it into your store. Here’s the best part! You can usually still sell this in your store for approximately half of the original retail value and essentially double your investment!
If you can find a Warehouse Scratch & Dent truckload or even a mix of Warehouse Scratch & Dent and Shelf-Pulls, you should give it serious consideration!