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Closeouts Vs. Surplus Merchandise – Which Is Most Profitable?

Closeouts Vs. Surplus Merchandise – Which Is Most Profitable?

If you are looking for merchandise to sell in an online store, or to offer in quantity to retailers, you may be wondering what the difference is between a closeout and surplus merchandise.

I have written about this subject for training new liquidators and it is important to address it here as well. Let’s take a brief look at this head scratcher so that you can move forward and make the right decision for your business.

Let’s start by examining what we mean by:

Closeout Merchandise

A closeout is a sale or discontinued price on products or merchandise. When goods are discounted below their normal wholesale in order to move them out and bring in new stock, they are frequently referred to as being on closeout. Some retail stores advertise on a regular basis that they sell “closeout merchandise.”

What this means is that they buy through channels and from sellers that have merchandise which is being discounted.

This is an indication that the merchandise may, at some point in the future, become available at a price suitable for your surplus liquidation business. This may happen if the seller has excess or leftover merchandise at the conclusion of the closeout sale.

One way to find this type of post closeout surplus is to look for warehouse sales in your city. They are often advertised in the print and online weekend classified sections of local papers.

Sellers will want to liquidate remaining merchandise at the conclusion of these sales. In most other situations when dealing with closeout merchandise price negotiation is almost always necessary as this price level is generally above a liquidator’s price.

Now, let’s take a look at what we mean by:

Surplus Merchandise Surplus means an amount or quantity greater than needed. The excess inventory that a business has, over and above what it needs or wants, is often referred to as surplus merchandise. It is, in effect, leftover merchandise that must be moved or sold in order to make way for new inventory.

Merchandise classified as surplus offers potentially high returns on the investment dollar for the surplus liquidator and for the end retail seller because this new and retail ready merchandise can be purchased at a lower price point than new goods in normal wholesale channels.

Surplus merchandise, like closeouts, may frequently be retail ready, meaning that it is packaged and can be placed on a retail store shelf or listed in an online store for sale to the consumer market.

This merchandise is also sometimes loosely described as closeout merchandise. But don’t be fooled. It is NOT the same thing to a serious entrepreneur, and will not, when classified correctly, typically produce the same profits.

Both closeout and surplus merchandise can, of course, be profitable for resale. And both types of merchandise encompass a broad range of retail products such as can be found in almost any store or shoppe.

The difference may simply be the price that the seller is willing to accept for you to commit to his inventory. Surplus may be purchased for up to 90% lower than wholesale. Find merchandise at this price level and you will have total clarity on what you have discovered!

Walk into a drug store, discounter, electronics shop, gift store, jeweler, clothing store, hobby shop, hardware store, party décor store, dollar store, costume store, pet shop, the list goes on and on. Name almost any type of merchandise and there is an excellent chance that at some point that type of merchandise will find some categorized as surplus merchandise, ready for liquidation.

As an astute entrepreneur you must be vigilant as to the classification. If you are looking for merchandise, you may find genuine surplus merchandise at a closeout sale… but only when that sale is concluded and there is some merchandise leftover that now must be liquidated.