Liquidations and returns to big companies like Amazon and Walmart have created an amazing opportunity for small businesses. Small business owners all around the country are bidding on returns and liquidations pallets that the giants don’t bother to restock, then flipping the goods on those pallets for a profit. It’s a clever business strategy that is leading to a lot of growth — but it’s important to grow in the right way if you’re going to stay successful. Here’s how to grow your liquidation business.
Grow slow and grow smart
Growth is exciting, and it’s the sign of a healthy business. But it can also be very dangerous. If you grow too fast, you could put your whole business at risk. In general, it is better to grow more slowly than you think you could than to push the limits and risk a collapse.
Scale up methodically and carefully. Think about what you’ll need to achieve a larger scale — you’ll feel pretty silly if you buy more goods than you have room to store or time to sell. Expand your spaces and, perhaps, your workforce, then make the move to increase the scale of your goods purchasing and selling. And plan and consider every move carefully before you make it — when it comes to growth, you want to measure twice and cut once.
Work with the right partners
Your liquidation business relies on more than just you and others within your company. If you’re buying liquidation pallets, then you’re working with auction sites that you’ll need to be able to trust to deliver quality goods at the agreed-upon price. If you’re mailing out goods to your customers, then you’re obviously relying on the postal service or one of its private-sector competitors to deliver the goods on time and for the right price — and to stand by any insurance guarantees that you buy.
As your business grows, you need to be careful about who you work with. The larger your scale, the more it matters that you’re using the most affordable and effective shipping method. And if you’re buying lots of goods, then you had better make sure that you are working with a reliable supplier, liquidation experts say. You need to be able to trust that the Walmart pallets you’re buying are really from Walmart and that the Target pallets are really from Target. You need quality goods if you’re going to keep your business running and growing.
Do you need more employees?
One of the most important considerations for a growing business of any kind is whether to hire new employees. Can you manage your business alone? Be careful — if the scale of your growing business makes you sloppy, you could cost yourself money. On the other hand, you will want to be very careful about whether and who to hire. Hiring the wrong employee can be a very costly proposition, because hiring and firing people is not cheap.
You’ll want to choose your first employees carefully, and you’ll want to hold onto them, because employee turnover is wasteful. Make sure that you really need everyone that you hire — some of your business’ needs will be better outsourced.
As you grow your liquidation business, you’ll have the ability to buy and sell larger quantities of goods. But be careful! Part of what made your business successful in the first place was your focus and your attention to detail. Maximizing your profit on each item that you sell is still important, and you’ll have less time to focus on each item as you scale up.
That’s why you should stay focused on a certain area of expertise. Finding a niche will help you make decisions and set prices more accurately and more quickly. When you know everything that there is to know about the resale value of a given category of goods, such as electronic accessories, then you’ll be able to scale up more efficiently. By contrast, if you’re just buying pallets at random, then you’ll be much less efficient as you try to figure out how to price and profit off of all of these diverse goods.