During our research on ‘how to do retail arbitrage and Amazon FBA,’ I had repeatedly read about the opportunities available with liquidation merchandise.
A lot of articles would mention online liquidation stores through which you could be large lots of products, but we weren’t quite comfortable with the idea yet of ordering liquidation merchandise in bulk. I was imagining getting hit with large delivery fees, or having a crate delivered filled with used and damaged merchandise returns.
We began searching for liquidation outlets near home, and ended up having some success. There were a few smaller strip-mall locations here-and-there, and some liquidation warehouses in the city that had random hours when they were open to the public.
We were lucky enough to find a place that was in the middle of clearing out a bunch of electrical outlet timers as well as some tool pouches. Both of these products were in good condition and still in their retail packaging. In fact, many of the units were still in their original shipping boxes.
At first, we didn’t see the profit potential. When we scanned the items, Amazon listings did show up, but the listings were horribly made. Basically they had just one picture each – (and the picture was very bad) – there were very brief descriptions, and no bullet points listed. Whoever had made these listings had no idea what they were doing. As a result, these products had horrible ranks and were selling for very low prices.
Unfortunately, Amazon’s rules require that you don’t create separate product listings for items that are already listed on the site. This wouldn’t be a problem if it were possible to update the listings with better pictures and descriptions, but this is either not possible, or a huge hassle.
What Amazon does allow though, is for sellers to create new listings for multi-packs and bundled items. With this option realized, we decided we’d take a chance on the bulk buy of electrical outlet timers and the tool pouches.
We simply created our own listings for these products by packaging two timers together, and two pouches together. Of course, this wasn’t very creative, but at least it gave us the chance to upload our own photos, and add our own descriptions, bullet points, and keywords.
After our listings were uploaded, we spent a couple of weeks advertising them to generate interest and sales, and both listings were soon marked by Amazon as top new listings in their respective categories.
The difference in prices between what we paid for these items and what they ultimately sold for was dramatic. As time went on and our sales grew, we continued raising the prices as long as the customers continued to buy.
Eventually we sold out of all of these products, but we had learned the power of buying at liquidation, as well as the skills to create listings, take pictures, and implement Amazon advertising. This knowledge and these skills would continue to serve us as we moved forward with our FBA business.
The next phase of the Amazon FBA business we needed to learn, was how to get approval to sell in Amazon’s gated categories…