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How to Source and Profit From Returns Liquidation Lots Bay Area e-Commerce Group Meeting Lauren Ruiz and Kellen Campbell

How to Source and Profit From Returns Liquidation Lots Bay Area e-Commerce Group Meeting Lauren Ruiz and Kellen Campbell October 23, 2013. The Liquidation Industry. U. S. Secondary Market Market Size = $329.4 billion. The secondary market represents 2.28% of the U.S. GDP.

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How to Source and Profit From Returns Liquidation Lots Bay Area e-Commerce Group Meeting Lauren Ruiz and Kellen Campbell

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  1. How to Source and Profit From Returns Liquidation LotsBay Area e-Commerce Group MeetingLauren Ruiz and Kellen CampbellOctober 23, 2013

  2. The Liquidation Industry

  3. U. S. Secondary MarketMarket Size = $329.4 billion The secondary market represents 2.28% of the U.S. GDP Factory Outlets ($14.1) Dollar Stores ($17.6b) (Dollar General, Family Dollar, Dollar Tree) Value Retailers ($30) (Big Lots, TJ Maxx, Marshalls) Flea Markets ($33) Charity ($2.6) (Goodwill, Salvation Army) Pawn Shops ($.5) Source: Creating Value Through Product Stewardship and Take-Back, Rogers, Rogers, Lembke, 2010).

  4. Liquidation Merchandise Breakdown About 9% of products bought at retail are returned (National Retail Federation) Source: Creating Value Through Product Stewardship and Take-Back, Rogers, Rogers, Lembke, 2010)

  5. Returns: The Retailer/OEM Dilemma(Why is their problem our opportunity?)

  6. Secondary Market Channels

  7. Anatomy of a Returns Lot – Is it Risky? Wrong color, wrong size, found at lower price Buyer’s Remorse One-time use DIY projects, “Super Bowl TV” Cosmetic issues:Box & Product Box damage – retailer returnsProduct - small nick, scratch Percent will vary! Less on “dot com” returns. Not working

  8. GMP warehouse

  9. GMP warehouse

  10. What happens to returns?

  11. Typical Pallets

  12. Introduced in June - Carton-sized Lots!

  13. What Do Small Liquidation Lot Buyers Want?Results from a GENCO survey of 650 wholesale/liquidation lot buyers

  14. Buying Profile Is buying and reselling your primary occupation or a part-time activity? Do you primarily purchase liquidation lots and resell to consumers or other businesses? Base: 653 Base: 653

  15. Purchase Quantity In what quantity do you typically purchase merchandise? How many pallets do you typically purchase monthly? 60% buy 4 pallets or fewer per month Base: 653 Base: 653

  16. What percentage of the inventory that you purchase for resale is consumer returns? Almost half purchase most of their inventory from consumer returns. Base: 653

  17. What Are Your Primary Reselling Channels? Base: 653

  18. What Is the Profit Opportunity From Buying/Selling Returns?

  19. Why Buy Returns Lots? • Profit Potential • LOTS of it. Steady supply. • Not aged inventory. Stuff buyers want. • Sorted into categories. Stuff you want. • Not deep in any SKU. Move what you’ve got. • Reasonable purchase quantity. Single pallets, cartons • Lower cash investment. More profit for you.

  20. The term “Waste Factor” is a misnomer There is a market for ALL conditions of product (ebay category: “For parts or not working”) “Waste Factor” – a MisnomerThere is a market for ALL conditions of product

  21. Profit Analysis on Returns (pallet buyers) For almost 30% of buyers, returns are a 25%+ profit business

  22. Case Examples

  23. Planet Overstock • Ultimate skeptic • Returns drive growth • FROM: basement… • TO: 10,000 sqft & beyond…. • KEYS TO SUCCESS • Niche focus, with some • diversity John LaRocca

  24. Sweet Reflections • Brick & mortar plus eBay & Amazon • Burned by brokers (cherry pickers) • Direct sourcing drives growth • FROM: a few pallets • TO: $4 million+ in purchases • KEYS TO SUCCESS • High-volume, price to sell • Sell everything! Jason Carrick

  25. SSF Auctions • Quit the rat race • Dot Com returns drive growth • FROM: 4 pallets in garage • TO: 50 pallets in rented space • KEYS TO SUCCESS • Online returns • Kitchen appliance focus • Close examination of manifests to assess profit potential Charlie Gerk

  26. Easy-to-Use Website for Online Sourcing

  27. Top 10 Tips from the Pros (our most profitable buyers) • Buy Direct from the Retailer or their Direct Agent. • Find a reputable source and stick with them. • Understand your costs and your market. • Examine manifests closely. • Take a long-term view. • Find an inventory source close by. • Be honest about product condition. • When possible, buy in bulk. • Sell everything! • Work hard.

  28. Want to know more? Download our e-Book: http://www.gencomarketplacevip.com/ebook

  29. Thank you!

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