7 Things To Consider Before Bidding on Liquidation Auctions

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So, you want to start your liquidation business and are looking to participate in some liquidation auctions? Well, you are in luck because these 7 tips might help you reduce the number of mistakes you make, help you incur fewer losses and move towards higher profits.

Doesn’t matter if you want to start liquidation stores in Glasgow, London, Edinburgh or any other part of the world these tips will help you work towards bidding successfully on high-quality products.

Research is the Key

One of the biggest mistakes that you can make is jumping in without much info or knowledge. So, do due research before participating in any auction. Research the company that is holding the auction. Check its track record. Read reviews. 

Connect with businesses and entrepreneurs that have participated in auctions held by that company. Next, you need to research the lots that will be in the auction. 

You need to understand whether these lots have got enough value to gain you good profit. That way when you buy liquidation pallets after bidding you get good value.

Understand Your Niche

One of the other things that you need to consider is – do you understand your niche? There are several niches in every business and the liquidation business is no different. Whether they are liquids stores in Glasgow, London etc. or liquidation stores in some other part of the world they are working within a niche. 

One example would be sports merchandise. You can be an expert or authority in selling high-quality sports merchandise at good rates. Another niche can be smartphone accessories. When you have picked a niche, you need to understand it well. 

Do enough research and get all the info you can. This way you know what’s a good quality product in that niche and what isn’t. Best stores will help you to purchase liquidation pallets that have good-quality stocks you are looking for. 

Bid on Liquidated Pallets with Good Products

You need to invest some time and effort to find good pallets. Some companies source unopened and new products from big retailers. These products are overstocks, shelf-pulls or returns but they are in good condition.

One of the ways you can find trustworthy companies that auction off decent pallets is by reading reviews and talking to people who have already participated in those auctions.

Try to get referrals so that you can find good liquidation auctions. Do not bid on pallets that you have little idea about. There’s a high chance of incurring a loss.

You Need to Have a Customer Base

One thing that you have to do before you start bidding at auctions and buying liquidation stock is to build a customer base. You cannot buy stuff hoping to sell them if you have no customers. Now, of course, you won’t have customers from the first day itself. 

That’s why you should focus on starting small. Invest only a small percentage of your capital in securing products. You can invest more if you are okay with incurring the loss. The idea is to not blow your capital while building your business. 

Once you have a customer base and you know you can sell products you can go ahead and participate in more liquidation options and buy liquidation pallets.

Work Within a Budget, Always

One of the things that you need to be strict about is your budget. Never bid more than your budget. It’s a big mistake especially when you are just starting. Once you have enough experience you will know when risking more than your budget is going to pay off. 

But in general, never do that. You don’t want to blow your capital and then get demotivated in one of your first rodeos when you incur losses. So, be strict about your maximum expenditure.

Begin Small

Taking baby steps might be the best way to learn as well as grow your business. Of course, taking risks is important but you need to gain some experience first. That way the risks you take are more calculated. So, start your bids small.

If you have done some research and asked around in the liquidation business community you should be able to find good lots to bid on within your budget. Also, once you find a lot, bid small. You want to be as conservative as possible initially. 

Most people will also try to bid as low as possible. So, even if you are trying to outbid others, be as low as possible. Also, don’t cross your maximum bid limit.

There are Other Prices Involved

The bidding price is not the only price you will have to pay. There will be taxes and other charges like delivery charges involved. 

Most of these things will be mentioned. Once you have won the auction you will need to pay the company to secure your lot. If the warehouse is close by you can drive down and pick up the pallets yourself if you want to waive off delivery charges.

Conclusion

So, these were some of the things that you should be keeping in mind before participating in any liquidation auctions. A liquidation business can be profitable and if you want to become an entrepreneur you can get started with it.

But you need to be careful and know some common pitfalls that many businesses end up losing to. We hope our list of tips has helped provide you with a guideline on how to proceed when it comes to any liquidation auction or the liquidation business in general. Wish you all the best!

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