Clothing is a highly competitive industry, with the pressure to maintain customers’ interest. There is always a demand for new and trendy products in the apparel industry. 

This leads to the question of where the company should store old inventory that consumes a lot of space. So, How do we get merchandise for a clothing liquidation business?

What is a Clothing Liquidation Business?

If you live in Michigan for example, you can search for liquidation stores near me or buy liquidation pallets in Michigan. This will give you an understanding of what Liquidation stores are and how they are an easy and great business model for a side hustle. You can read further for a long explanation:

Clothing liquidation is a business that buys excess inventory from retailers who want to sell their old products in bulk to make more space for new trendy products. 

The liquidation store buys these inventories at a discounted price. Therefore, in this article, we will provide you with information on the process of obtaining merchandise for a clothing liquidation business.

Following is a brief overview of the steps you need to take to open a clothing liquidation store:

  1. You need to think about the money you can pull off for your new liquidation business. You don’t need to have a large capital, but you need some investments to buy your first clothing stock.
  2. If you want to make it a large-scale business, you should know what you are selling and decide whether you want to sell new or refurbished goods. It’s simple in the start to sell new inventory until you get used to your clothing liquidation business.
  3. As soon as you obtain your first inventory, you can then begin to resell it. You can terminate shipping costs by keeping your business local and selling it to brick-and-mortar stores, flea markets, or thrift shops.

Become an Authorized Reseller

Before you start reselling, you have to become a legit company to source liquidation pallets from an esteemed company and begin reselling. After you register your business, you will have to acquire your resale certificate. 

You will be exempt from taxes when you purchase inventory for resale with the certificate. All reputable wholesale liquidation companies or liquidation stores want you to have the resale certificate to purchase goods from them for reselling.

Buying Merchandise for Clothing Liquidation Business

You can buy merchandise for the clothing liquidation business in various ways. A significant way to buy liquidation pallets from large retailers is from their online liquidation marketplace. 

Mostly all big retailers like Macy’s, Walmart, Target, and Home Depot have their own liquidation marketplace online. In addition to liquidation inventory, you can also purchase overstock and customer-returned items from these marketplaces removing a middleman. 

Also, Read: What is Retail?

Most of the sites use an auction-based format. In this way, you can browse through all live auction lots and bid whatever amount feels comfortable to you.

Resell Items

Now you have your first inventory and you’re ready to resell it. Like you have purchased your goods from online marketplaces, you can also resell them on the same sites. 

Do your research and keep in mind which marketplace will give you better prices. You can also sell your items on Amazon and Facebook marketplace. But, while you are establishing your business, we would recommend you keep your clothing liquidation business offline and start selling in the local market. 

Selling offline will not only help you terminate your shipping cost, But it will also help you build relations with local businesses. For instance, you can start selling in brick-and-mortar stores, thrift shops, and flea markets.

Wholesale or Liquidation

When you are researching about clothing liquidation business, you have probably come across the word wholesale. Liquidation and wholesale stores, both business models have similarities, but they are still much different from each other. 

For instance, Wholesale is when a company sells its products to businesses and retailers at discounted or wholesale prices. The amount can vary depending on the product company is selling, but the price is mostly fixed. 

On the other hand, Liquidation is when the company or business is trying to make quick cash by selling its overstock, and outdated goods to create more space for new, trendy inventory.