For example: I have a
product that I want to sell at $2.00 per unit, without many contacts I might
enlist a Broker to promote my $2 item and hopefully have Him/Her arrange all
of the details of the sale. The Broker would market my product through
various venues such as his companies website. He would then mark my $2 item
up to $3; that doesn't sound like much, but if I have 4-5,000 of this item
that would represent $4,000-$5,000 dollars in his pocket for moving my
Now, here is where trouble
can begin. When this broker allows another Broker to sell my inventory now
my $2 item will go up to $4.00
. Money is made by turning inventories
quickly, so why would the Broker representing me turn down an "outside sales
Rep" for help in moving the merchandise? They wouldn't. By the time my item
is purchased and received by the end consumer it is not worth what they
This happens over and over in
this industry and it stems from both parties (Consumer & Broker) not doing
their homework. It has happened so many times that there are many Business
owners out there wondering if it is even possible to find merchandise that
has been represented honestly and is actually being sold at below wholesale
There are great deals to be
found everyday, but you must first take the time to protect your interest.
Find everything out about the company you are going to deal with, ask for
actual references from customers. Talk to everyone who has purchased from
this company in question. If you cannot get references, walk away; period.
When you do get contact information inquire and ask as many questions as
possible. Hopefully the references will be of value with constructive,
Accessories- Term used
to reference personal items, such as handbags, purses, belts, hats, hosiery
and other items. This term is fairly standard in the industry, but it would
be wise to get clarification if interested in a load of merchandise.
Blind- Term used in
conjunction with load or lot. Blind lots are not manifested. Usually, when
buying "blind" lots/loads you will be given a general idea of contents, but
it will not be a guarantee. It is common for many large retail stores to
sell closeouts "blind" simply because a detailed inventory of contents takes
time and ends up costing more per item when purchasing.
Broker- A person who
buys or sells merchandise for other individuals and earns a commission or
profit based upon a percent of product.
Close Dated- Refers to
perishable merchandise such as food or over the counter drugs. If a product
has been sitting around past its expiration date...it would be considered
that is being sold below original wholesale cost. Can be Overstock, Shelf
Pull or Discontinued merchandise.
Merchandise that has been purchased at a retail level and then returned to
the original store for various reasons. Some returns are defective, broken
or simply returned for no apparent reason at all. A consumer might return
merchandise because it was bought in haste or by impulse. In this scenario
if the original packaging is not intact or missing a component the retailer
will deem it Salvaged. Defective or broken merchandise is a tricky area,
often products can be repaired if you have the skill required.
Domestics- Term used
to refer to bedding (sheets, comforters etc), towels, linens and other "soft
goods". Term might have a different meaning company to company so always
inquire definition before purchasing.
Federated- Refers to
the Federated chain of department stores including Bloomingdales, Bon Marche,
Burdines, Goldsmiths, Lazarus, Macy's East, Macy's West and Rich's. When
merchandise is described as "Federated" it is from this chain of fine
department stores. Generally considered in the industry and at a retail
level...Mid to high end quality.
FOB- "Freight On
Board" This refers to the location of the merchandise being represented and
shipped from. This can be some indication that the merchandise is being
"Brokered", obviously if the company you are dealing with is located in
Texas and lists merchandise FOB Florida you can almost assume your broker
has never seen the merchandise offered. Be careful as this is not the case
in all situations. A company may have multiple warehouse locations. This is
a grey area and very hard to determine. You will notice many companies
stating, "We have many FOB or warehouse points all over the US". This should
not be construed as company owned facilities.
Manifest- term used
for a written inventory of goods in question. A manifest can list the
following information; Item model numbers, quantity of items, wholesale
value & retail value of individual items. A manifest usually does not list
actual item conditions. Manifests can be emailed or faxed if they are
available...ask when you call your dealer.
Pallet- Wood or
plastic base for securing large quantities of merchandise during shipping.
Retail- Price set for
items sold to the general public. The last mark-up in the cost to bring an
item to a particular consumer store. Please note, many items will have a
suggested retail price set by a manufacturer. This price does in no way
constitute a products' value as "suggested retail prices" are often
overlooked by retailers and priced according to market and/or trends.
merchandise refers to products that can no longer be sold "as new". There is
a large percentage of merchandise that is damaged while in transit to retail
stores. For instance, a pallet of toys may have packaging damage. The
retailer cannot sell the toys as new because the individual boxes show wear
or tear. This merchandise gets set to the side and labeled "Salvage".
Salvage can also refer to merchandise that has been returned to the store
for any number of reasons.
Stock Lot- Term used
to describe multiples of the same item. Example: a Stock lot of apparel
would be one garment in various sizes(Same style). Ask for clarification
Store Codes- Store
codes are numbers, one or two digits, that represent actual retail stores.
Most companies will refer to merchandise as being from Store Code (fill in
the blank) to give you an idea of quality and contents of lot or pallet.
Store codes are not usually posted on websites so you must request a listing
breakdown. There are roughly 12-15 codes you will see all the time ,as they
are the most popular. They are standard codes used in the industry, however
some companies may have their own coding system. Ask for clarification when
you call your company/agent.
information given to monitor progress of a particular shipment to its
destination. UPS, FedEx and Most freight companies will assign a number to
your shipment. This number will show various details of your delivery such
as the date to expect arrival. Most of the time you will have the ability to
insert the tracking number into the freight carriers website for detailed
Wire Transfer- An
electronic form of funds transfer initiated from your financial institution.
Usually your financial institution will charge a small fee for this service
Wholesale- Cost for
goods before retail markup.
Most smaller purchases can go
common carrier, such as UPS Ground. If the company you are dealing with has
a UPS or FedEx account they will send your shipment adhering to the
individual carrier policies. Shipping policies are different for each
company and are usually based upon overall package girth (length + width +
height combined) and weight of box. Clothing for example will usually weigh
in at 45-65 pounds per 100 pieces and can easily be sent through UPS or
FedEx. It is possible to ship, domestically, up to 400-700 units of clothing
through these carriers in multiple cartons. Remember, if the company you are
dealing with has an account with UPS or FedEx, they are receiving discounted
rates based upon the volume of packages they send on a regular basis.
There is a website
called Iship.com that allows you to easily
compare rates and services among multiple carriers, including UPS, DHL,
FedEx Express, FedEx Ground, Airborne Express and the US Postal Service.
City/State Zip Codes
Often larger purchases will
need to be delivered by a freight company. Freight companies require
merchandise to be secured to wooden or plastic pallets. Pallets are a secure
way to ship merchandise and can easily hold merchandise stacked up to 6.5
feet tall. Pricing is based upon weight and destination.
There are hundreds of
reliable freight carriers across the United States and most of the time you
can arrange the pickup of your purchase yourself. When arranging delivery of
merchandise be sure to have complete pallet details. The freight company
will ask you for pallet dimensions, height and weight. You will also need
the pickup address and destination drop off. Generally, it is cheaper and
easier to have your merchandise delivered to the nearest freight terminal.
Also note, delivery to a residential address will cost extra (usually about
If you do not have a loading
dock and/or fork lift you will need to specify delivery in a lift-gate
truck. Most freight companies charge extra for this service.
x W x H)
45 x 48 x 5
114 x 122 x 12
38 to 54
17 to 24
Standard Wood Pallet
40 x 48 x 5
102 x 122 x 12
32 to 45
15 to 21
40 x 48 x 5
102 x 122 x 12
20 to 30
9 to 13
Investigate/Research a Company
There are many factors
which will insure the profitability of your own business. Sourcing ethical
and reliable suppliers takes a lot of research, but without merchandise to
resell you have no business. So, with that your goal should be locating at
least three to five distributors you can purchase from ongoing.
The internet offers the
opportunity for millions of companies to transact with individuals across
the world. Websites have become virtual storefronts allowing for immediate
purchasing with the click of a mouse. Lets stop for a minute and look at the
criteria for shopping at a traditional storefront versus a virtual store
front. When you need a product for personal use (clothing, gift etc.)What do
you? You get in your car and drive to a retail store, go in an and find the
product you need. Once you find the product you need if it represents a good
value based upon quality and cost...you buy it. This formula for acquiring
merchandise is second nature to all of us, as we purchase merchandise almost
Here is the formula for
purchasing merchandise traditionally (Store front):
1- Product need 2- Locate Source 3- Evaluate quality versus Price (handle
What about a formula for
purchasing over the internet? In your search engine you type in "Closeout
Merchandise" and 10,000 or more websites/Pages are available. Remember a
website/Storefront can be created for a few hundred dollars today and
suddenly any individual can appear to be a large corporation. While a
professionally Designed website is appealing and aids in determining a
legitimate business, it is no indication of the companies ethics and
When you cannot see a
companies physical location or inspect merchandise by sight you must gather
as much information as possible to aid in your decision to purchase.
Here is a sample formula
for purchasing closeouts on the internet:
1-Find company through searching 2- Investigate company by gathering as much
information as possible 3-Compare results between other companies you have
found 4- Check References 5-Purchase. This is all done from your
Adopt your own criteria for
purchasing from a closeout company; if a company does not meet your
standards'scratch them off your list. Do not sacrifice your strategy for
deals that seem Too good to be true because remember...your first instinct
is usually accurate.