Finding profitable inventory to sell is one of the more challenging aspects of running a retail or resell business. One solution many business owners turn to is liquidation goods. Large retail establishments often liquidate large quantities of product that they either couldn’t sell fast enough or overstocked. If you use the right strategy, this could equal huge profit margins for you.

Find a reputable supplier

The first thing to do is find a reputable liquidation wholesaler. These types of businesses usually sell large quantities of wholesale liquidation pallets filled with new and profitable merchandise. But don’t just buy anything they sell. It’s important to choose the right product for your business model and make sure you factor in all the costs.

Don’t be afraid to ask the seller plenty of questions. Find out where they get their merchandise and whether it’s open-box items, returned merchandise, or overstock. Talk to the wholesaler before you make your deal and ask about shipping, packaging, or other hidden fees. It’s also a good idea to buy just one pallet to begin with so you can test their shipping and business practices before you do further business with them.

Choose a selling platform

Once you know what to sell, you’ll need a platform to sell it on. Online marketplaces like Ebay and Amazon are good choices as they have advertising already built-in. Marketing can still boost your business on these platforms, but it’s not absolutely necessary to stay afloat. Many people also opt for having their own websites either in addition to or instead of selling in ready-made marketplace. The reason they might choose to do this is because they have more control over their own costs.

Of course, online selling is not the only option for unloading liquidation items. You can also sell them in physical establishments. For example, you can open your own brick-and-mortar store, or you can set up booths at your local flea markets. You can even opt to have regular garage sale-type events and sell the merchandise from your home.

Market your business

Even if you sell on an online marketplace such as Amazon or Ebay, it’s still helpful to find ways to drive traffic. It’s even more important if you’re selling items in-person. There are a lot of techniques you can use like newspapers, promos, and trade shows. But those types of things depend a lot on the types of items you sell. Social media marketing, however, is the most popular, effective, and easiest advertising tool at your disposal. And Facebook is still the most popular platform, with over two million users worldwide.

Keep good records

It’s easy to lose track of how much you’re making if you don’t keep good records. You’ll need to specifically track how much you pay for an item, including taxes, shipping, and other fees. You’ll also need to record exactly how much it sold for and what it cost you to get it to your customer. For example, if you sell items in a flea market, be sure to calculate booth rents and other supplies into your expenditures. When you have exact calculations, it’s easier to make decisions on what to restock and what to get rid of. And if accounting isn’t exactly your strong suit, there are plenty of people who offer the service online at affordable prices.

Take care of the paperwork

Lastly, don’t neglect the legal obligations that go along with owning a business. You can start online with websites like SBA (Small Business Administration) and your city and county offices. Find out what your limits are when running a business from your home before you ever get started. You could have city code restrictions you never even knew about. These types of things can end up costing you big portions of profit if you’re not diligent from the beginning.

Liquidation businesses are on the rise, and for good reason. Keep these tips in mind to set your liquidation business up for success.