If you’ve decided to give the pallet flipping business a try, you might be eager to buy liquidation pallets, flip them, and count your profits.
Here are the top ten tips to help increase the profit potential of your liquidation pallet business.
1. Do Your Research
Research as much as you can, even if you feel confident about your business knowledge and operational skills.
Start by learning everything you can about the product you’re selling. What is the wholesale pricing for this product? What is the price difference between new and refurbished versions? Is the product seasonal? Can you offload it quickly? What is the best way to market it?
Learn more about the demand for your products and the audience you should target. What selling platforms are appropriate for this type of product? What are the demographics of the consumers you can sell this product to?
Next, study your competitors, their business models, and selling platforms. What are the selling points they use in their marketing?
Find trustworthy suppliers you can buy those products from, their contract conditions, delivery speed, and shipping options. Most suppliers have a minimum order requirement, and a few provide guarantees for their refurbished products.
Create a budget and calculate all the expenses you’ll be undertaking to determine the best pricing strategy for consistent profits. Consider pallet prices, shipping costs, taxes, logistics, and other fees. Don’t forget to account for the storage, packing, and shipping costs.
2. Choose the Right Supplier
You did your research to study suppliers in the market. Now you must also narrow down the list to find the best supplier for your business.
For starters, check if the supplier has multiple warehouses near you to save on shipping expenses. Check where they source their inventory—national retailers are great if you want varied inventory. Partnering with online liquidators is ideal because they are convenient, and you won’t need any middlemen.
Working with suppliers that send damaged goods or are always late on deliveries will lead to huge losses for your business. Again, due diligence is crucial—look up client reviews and ask for referrals to find the best possible suppliers for your pallet business.
Make sure to read the fine print before signing any contracts. If you find terms that will not benefit your business, don’t hesitate to negotiate. Be firm on your non-negotiables and leave the rest open for discussion. At the same time, be ready to compromise on some terms unless they will directly hamper your operations.
3. Look for the Right Liquidation Pallets
Comparing pallets is a tricky endeavor. You must closely consider many elements: prices, suppliers, shipping costs, etc. You should also know about the grade and manifest descriptions of the products you’re buying.
Manifest descriptions include information about the contents of the pallet. They’re your best bet at learning what’s inside and if they have profit potential.
The grade assigned to pallets depends on the condition of the products within.
4. Get Your Reseller’s Certificate
A resale certificate or license allows you to purchase pallets without having to pay taxes at purchase.
You can find out how to acquire a resale certificate by visiting your state’s Department of Revenue website.
5. Strategize Your Operations
Invest in suitable storage space based on your product and business requirements.
Plan a warehouse layout and designate areas for receiving, cataloging, storing, packing, and shipping goods. Section off an office area to manage sourcing, listing, administration, and customer service-related tasks.
Label all products as soon as they arrive. Then, itemize and catalog them against the manifest document. You can also sort the products based on their condition, resale value, or selling platform.
A great way to simplify your operations is to create a tracking system to locate and pack items more quickly.
6. Organize Your Inventory
To stay on top of your inventory, you need to be able to track every item that goes in and out of your warehouse. Creating a tracking system is the first step. The next is to make a spreadsheet, or better yet, invest in inventory management software.
Sort and arrange your inventory by installing racks, shelves, or storage bins, depending on your inventory and business structure.
7. Optimize and Maximize Reselling Platforms
To maximize your profits, list your products on multiple online platforms. This will give your items maximum exposure to the highest bidders.
But don’t just list all of your items on every selling platform you can find. Consider the product’s condition, your target audience, market demand, and price. Then, choose the best platform through which you are most likely to unload inventory quickly.
8. Keep Track of Your Sales
You must have a system in place to closely track your sales, profits, and losses. Inventory management software and similar documentation and tracking tools can make this process easy.
Learn how to calculate your investments, earnings, profits, and losses from every pallet. Keep track of your cash flow and determine where process or ordering improvements can be made.
9. Prepare for Setbacks
Selling liquidation pallets as quickly as possible is key to your success. But sometimes, you may have to cut your losses—you may not be able to sell everything you get. Do not hold on to items for so long only to get stuck with inventory with little to no demand.
Prepare for setbacks and keep your options open to offload slow-moving inventory and clear space for in-demand items. Make a list of local auctioneers for a quick sale. As a last resort, keep a list of homeless shelters, thrift stores, and churches you can donate to. Account for these temporary losses and make up for them with fresh inventory.
10. Be Patient
Just because a pallet is available for rock bottom prices doesn’t mean it will automatically generate high profits. Patience is an important virtue for resellers. You must know when to seal the deal for a top-quality pallet that contains brand new, unopened products and when to back away from a deal that’s too good to be true. Both are equally important.
There’s a lot to get right when flipping pallets, from the research phase all the way to storage, selling, and accounting.
We hope these tips will be useful in your reselling journey and help you generate tons of profits from your pallet flipping business.