Is My Surplus Bargain Load Guaranteed?

Is My Surplus Bargain Load Guaranteed?

No, sweet dreamer, and here is a short explanation of why not.

The salvage surplus market is the outlet of last resort for consumer goods.

That means it’s the original product owner’s opportunity to do the following two things, which are his primary objectives:
1. Recover whatever money he can from his investment
2. Cut further losses

A small percentage of the original investment can be recovered on surplus bargain goods by contracting with a wholesale distributor to purchase them all for a fraction of their wholesale cost. These goods consist of product that either did not sell, became outdated, damaged, returned by customers or in any other way is no longer desirable in the primary retail market.

Surplus product can be purchased on mere pennies on the wholesale dollar.

For that kind of opportunity, the wholesale distributor will agree to take all such goods immediately as they become available, exactly as they are presented and without any right of return, refund or guarantee. It’s the original owner’s surplus bargain goods and he sets the terms according to his objectives, and another of those is speed of movement.

It can actually be more costly to handle surplus merchandise in house than to sell it at cut rate prices through salvage distribution channels. Along with other factors, time’s expensive and so are worker’s salaries, even at minimum wage. The longer and the more often goods are handled, the more costly they become. By selling cheaply, the owner can recover money faster and stop the clock on handling expenses.

The wholesale distributor now has goods he cannot send back.

Since the wholesale distributor is not given the right of refund or credit, he must resell by the same terms under which he bought the goods himself. That means the distributor’s customers also must contract to purchase the product “as is, all sales final” and with no guarantee.

Do you see the pattern developing here?

Unlike the consumer driven retail market where consumer satisfaction is king, the surplus market is recovery driven and recovery is king, so there is no back flow in this market. That is a point that seems to confuse a lot of buyers – that the surplus and retail markets are not one and the same, and therefore, do not have the same objectives.

The reason, of course, is that all goods originate with the retailers or manufacturers, and it is they who set the terms of sale for the entire market. Their terms of sale trickle down to wholesale distributors and on through every level of the industry as a matter of necessity.

If returns or refunds were guaranteed, buying consumer goods at pennies on the wholesale dollar would simply not be an option.

The fact that there is no built in margin to accommodate the expense involved in giving refunds, making exchanges, giving credits, shipping rejected loads back to the warehouse, processing cancelled orders, etc., is one of the major reasons you can buy this merchandise at the prices you expect to pay.

So, in effect, guarantees have been exchanged for the opportunity to buy at just pennies on the wholesale dollar.

Even sometimes as low as just pennies of cost. If the rules suddenly reversed, would you be willing to pay the much higher prices that a guarantee would require? Most likely not, because being able to buy at such low prices is the only thing that allows small businesses any chance at all to compete with “big box” retailers.

It would be wonderful for all of us, sellers and buyers alike, to have a system that allowed for both rock bottom prices and the high quality of each and every surplus load. What a lot of headaches and heartaches that would eliminate for everyone involved. But for the time being, I’m afraid that possibility remains just a sweet, sweet dream.

Copyright © 2005 Liquidation Wholesalers, LLC. All rights reserved. This article may be re-published as long as it appears in its entirety, unedited, and this resource box remains intact. For more information or articles on the wholesale industry, visit us at www.liquidationwholesalers.com or contact us at 205-913-0744.

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