It’s no secret that the pandemic destroyed many small businesses across the country and around the world. Family-owned shops and restaurants struggled to get by as businesses were ordered to shut their doors. In fact, experts estimate that as of May 2021, as many as a third of the US’s small businesses are still closed, compared to January 2020. How can retailers who survived help rebuild the small business economy while also benefiting their companies? Getting out of this slump might require a little entrepreneurship.
B-Stock is a B2B liquidation auction platform that helps retailers move excess or damaged inventory while supplying existing resellers with still-valuable merchandise. Or perhaps you’re wondering how to start a retail business? Buying liquidation auction lots and reselling them through eBay, Amazon, and other online marketplaces may be the answer.
Excess or Damaged Inventory
It’s common for brands to face the problem of excess or damaged inventory. There are several reasons this happens, and almost every retailer will eventually face the issue at some point.
When seasons change or products become obsolete or go out of fashion, often retailers are left with slow-moving inventory. To make room for fresh new products and use their warehouse space efficiently, they have to get rid of the old stock.
Damaged inventory is also more common than you may think. Customer returns, floor models, and items that arrived broken from the manufacturer all take up precious warehouse space. While this can cause logistics headaches for stores and eCommerce businesses, those with a streak of entrepreneurship see an opportunity.
What’s a retailer to do? In the past, these products would often be bound for the landfill. Thankfully, many of today’s brands are a bit more environmentally conscious. Many retailers choose to liquidate their excess or damaged inventory into the secondary market. But what does this mean, exactly?
The Secondary Market
If you’re not quite sure what is meant by “the secondary market,” you’re not alone. Retailers that operate in the secondary market buy and resell returned, used, damaged, and overstock goods at a profit. This concept goes beyond just used car lots and thrift stores—think dollar stores, outlets, auction houses, and even flea markets. Today, many of the products offered on sites like eBay and Amazon come from the secondary market as well.
When a retailer chooses to liquidate with B-Stock, they offer bulk lots of goods to other businesses. Whether it’s several cases of last year’s hottest cell phones, pallets of returned apparel, or a truck full of scratch-and-dent furniture, a vetted group of small businesses will be there to bid.
Small businesses and entrepreneurs bid on products through our site, then arrange payment and shipping for their goods. Once buyers take delivery, they unpack and examine their finds, then repair, resell, or salvage them as appropriate. It’s a win-win situation since the seller gets a fair price on products they no longer want, and the buyer receives stock to fuel their own venture.
The vast majority of those who buy our liquidation auction lots are small business owners, and they’re often sole proprietors. These liquidation auctions allow them to get their foot into the retail door without considerable investment in inventory. And if you’ve ever seen the show Extreme Unboxing on A&E, you’re already familiar with that excited feeling of receiving a liquidation auction lot. From that point, there are a few ways that entrepreneurs can run their businesses.
The most common and straightforward option is to inspect and then resell the items as-is through online marketplaces like eBay. In this business model, liquidation buyers simply list the products for sale, being honest about any flaws or defects, then ship the products and pocket the profits. It’s an excellent way to get started in online retail without having to meet minimum order requirements or invest in a brick-and-mortar presence.
Additionally, a savvy buyer with a sense of entrepreneurship might choose liquidations as a way to fill the shelves of a physical store. For example, Mom-and-Pop discount stores or small boutiques may use this method to round out their primary product line.
Finally, repairs and salvage buyers may purchase damaged electronics, home appliances, and other goods to repair or use for parts. They can then resell these items as refurbished goods either online or in their local area.
No matter how buyers choose to profit from the liquidation lots they purchase, the practice is good for the economy and the environment. Want to learn how your brand can help build small businesses? Check out our helpful Seller’s Guide online or request a demo today.