What Are Liquidation Auctions?

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E-commerce has forever changed the way people shop for goods. Shopping online allows buyers to find the best deals possible, meaning that competition is now tighter than ever. To survive and thrive in the current business climate, you have to be crafty and innovative.

If you aren’t working with a large budget, then it is best to keep your overhead costs low so you can turn a profit. Many small businesses find themselves underwater in their fifth year, so if your business if new, then prudence is a must. In business, prudence means frugality.

Purchasing operational equipment, furniture, and even items for sale through liquidation sales and auctions is one way to limit your costs. Liquidation sales are often stigmatized as being unreliable havens for trash, but this is a solution that’s gaining traction in the business world. Liquidation auctions can benefit your business.

What is liquidation?

As mentioned before, only about half of small businesses make it past the five-year milestone. In that five-year period, those businesses acquire debt from lenders and get investments from shareholders who want what they’re owed. Often, these companies hold liquidation sales to meet those requirements.

What makes liquidation sales so attractive is that you can find quality goods at greatly reduced prices. Buying items on liquidation can even be more cost-efficient than purchasing goods from wholesalers.

Because these businesses are looking to settle their debts rather than make a profit, they may sell some of their operational equipment. When a company is liquidating its assets, they can sell everything from the items that they had in stock and couldn’t sell — to their furniture and vehicles.

How liquidation has changed

E-commerce has revolutionized business, and it will only continue to grow in the future. Liquidation companies are capitalizing on these changes in ways that benefit you. Now, these companies have gotten into the business of selling bstock items online.

What is B-stock? Surely you’ve purchased an item, and even though it functioned properly, you still had to return it for some reason or another. When you returned that item to a retailer, they didn’t just give you back our money and throw it away — they sold it again. When they sold it that second time around, it was sold as B-stock.

In contrast, A-stock is brand new merchandise and can be sold as such at full price. For an item to be considered B-stock, it must still be in mint condition when it is returned. If it is, the company will repackage it and resell it.

B-stock items are often sold at prices well-below what even a wholesaler would offer them for. When you buy these returned items, you purchase them by the pallet, so you’re buying discounted items in bulk. Because you’re getting the items at such a discounted price, you can sell them again at a discounted price and still make a profit. These items usually come with three-year warranties and 30-day money back guarantees.

Benefiting from liquidation auctions

Many new business owners make the mistake of spending too much money trying to make their location appealing to customers. It is true that presentation is everything when trying to draw customers, but you have to be smart about your overhead costs. At liquidation auctions, you can find everything from swank furniture to the latest equipment at a low price.

Liquidation sales are also an innovative way to create your own stock. You can sell these items over the internet at a greatly discounted cost. You can even get creative and sell items that are usually more expensive as rent-to-own merchandise. By allowing your customers to make payments, you can sell your items at a steep discount and recover your profits by charging interest.