Is Your Liquidator Cherry-Picking?

Is Your Liquidator Cherry-Picking?

When you're just starting out in purchasing liquidation lots, it's difficult to know who to trust. I get it. I've been there, too.

If you can't put your eyes on the actual pallet or lot you're purchasing,

all you have are a few poorly taken pictures,

and knowing you're going to have to invest a larger amount than you would at your typical thrift store or retail arbitrage run,

it's natural to be a little cautious about what, how much, and from whom you're trying to purchase.

There are many large liquidators out there that have some sort of guarantee.

Bulq.com has a 98% accuracy rate or they'll make it right. That means if there is incorrect information on the manifest that causes the pallet or lot to reduce greatly in prospected value, they'll give you a credit to purchase more items.

Others have similar guarantees.

However, there are many liquidators out there (especially the smaller scale ones) that do not have such guarantees. Many liquidators may be resellers themselves and that can pose a problem for you and your business.

In many pallet flipping situations, I find myself purchasing pallets and finding one or two high dollar items in those pallets that will pay for the price of the pallet. When that happens, all the lower value items become profit. If your liquidator is a reseller and sells individual items as well, there is a very good chance they're picking those high dollar items out of the pallets, selling them for profit and then reselling the rest of the pallet to other resellers. This can greatly affect your profits and if you're not careful, you could not break even at all in this situation.

Finding out which liquidators "cherry pick" their pallets is fairly easy.

Before making a decision to use a liquidator, I would call them and ask a few questions.

1. Ask them if they sell individual items as well.

If they do, I would be very cautious about purchasing pallets from them. It is more likely they're getting their high value inventory from the pallets they're selling to you, rather than unloading a whole pallet themselves.

2. Inquire about a guarantee.

Are their pallets manifested? If so, do they have a guarantee for credit or refunds if the pallet contents do not match the manifest?

It's not necessarily a deal breaker if they don't offer a guarantee, but always use caution anytime you cannot protect your investment after you've purchased it.

3. Read reviews from people who have purchased before you.

Do they have a lot of happy customers? Every business is likely to have a few disgruntled customers. But if they have any negative reviews, what are they saying? Are they all complaining about the same thing? Are there any positive reviews to counteract what the negative reviews are stating?

In the end, it is absolutely your responsibility to protect your business and how you source them. The risk in purchasing pallets and lots in bulk like this is that most of the time, you don't get your hands on the product until you've already purchased them. Anything like this is a calculated risk, so it's important that you do everything you can to protect yourself from losing out. We learned the hard way so you don't have to.

Drop a comment down below if you've got questions for us, we're happy to answer them!

Happy reselling!