An important part of learning how to start a liquidation business is developing a strategy for long-term success. Like a home, a reselling liquidation business needs to rest on a stable foundation. Whether you’re getting into the liquidation industry as a side hustle or as your primary means of income, keep these tips in mind to get your business off to a strong start and increase the chances of success for years to come.
Protect Your Business by Diversifying
Diversifying your types of merchandise, your suppliers, and your sales channels will ensure that you never run out of products or avenues to sell your merchandise. In this business, everything is contract-based. You never know when a contract may change hands to a new supplier, leaving you without access to your favorite merchandise that you have built your business around.
If you have multiple sources for the same merchandise, there is a good chance you can maintain access to it. Or, if you cannot maintain access to the merchandise, but you sell multiple types of merchandise, then losing one type will not destroy your business.
The same idea holds true for how you sell your items. If all of your sales are based on one specific sales channel, you are at risk of losing buyers and profits if something changes in that channel. Think about people who exclusively sold at flea markets when the COVID-19 pandemic affected the world. All flea markets were unexpectedly forced to close for several months, which meant these sellers didn’t have their main avenue to move their products (especially if they didn’t have an e-commerce division).
Continuously Search for New Customers and Suppliers
As you learn more about how to become a liquidation seller through experience, continue to search for new sales channels and suppliers to support your growth and long-term success. Seeking out new resources will compound over time and deliver big results.
Once you find your first supplier, do not assume your work is done. Network, research on Google and Facebook, and attend trade shows to continue to grow your customer base and diversify your business.
You’re never really done learning how to become a liquidator. In this industry, sometimes you will need to shift to selling and buying trends to continue to bring in sales and source high-quality merchandise that you can sell with favorable margins.
Expect the unexpected and be adaptable. Experiment with different selling styles and different types of merchandise to make up for any low points in your main stock.
Grow at a Smart Pace
Growing too fast in the liquidation industry can cause you to become over-extended by the number of products you’ve purchased for resale. You need to be selling as fast as you are buying.
Remember to manage your overhead expenses and force yourself to work with less square footage and staff than what you think you need. This will help you to maximize your resources. Also, to be successful in this industry, you need a list of consistent buyers and logistics in place for positive growth.
Growing a liquidation business at a rapid rate makes it easy to overlook some of these important building blocks to support a business of that size.
Maintain a Growth Mindset
As you grow, outside observers will gladly offer their opinions about your business, telling you how great your liquidation business model is and that you seem to have it all figured out. But as experienced liquidation resellers will tell you, it’s important to not get too complacent in your business model and maintain a teachable attitude.
It’s not a bad thing to think about what could threaten your business down the line. This attitude will keep you sharp and focused on the important details of your business’s success.
Test New Merchandise Before You Make a Big Commitment
Test new merchandise types in smaller quantities before committing to larger volumes. New merchandise types carry new risks because you will not have a history with this form of product.
You can manage this risk by starting small, even if you have to travel farther to obtain the merchandise you want to test.
Understand the Liquidation Business Better
Are you looking to start a liquidation business? For those who are experienced or just getting started in the liquidation industry, our eBook will prepare you to make better decisions for your liquidation business. Download your free copy today.