Starting your own liquidation company is a fantastic, attainable solution for looking to become their own boss. Plus, with the increasing available inventory rate, it has never been simpler to get your hands on premium, brand-name products at bargain prices.
If you make the most well-informed first moves, joining the wholesale liquidation trade can be a very profitable next chapter in your life. This is mostly because, irrespective of economic factors, this business model remains profitable at all times of the year— no seasonality lets you take advantage of consistent profitability. So if you intend to launch your own wholesale liquidation business, consider this guide on what you should know before diving in.
Step #1: Develop a business plan
Before you undertake the first leap into your new business, be sure that you establish a well-thought-out business strategy, as this will set the framework for the future of your wholesale liquidation business. You will need to provide items such as the company description, the category of liquidation goods you plan to supply, and other important details when developing your business. Having all of this in order will assist the company today and in the next three to five years. And even if you intend to operate on a virtual basis, this first step is important.
Step #2: Find reputable liquidation sites or wholesalers
It would be best if you did research each step of the way to excel in wholesale reselling. Do some analysis of the various liquidation and bulk inventory companies you might want to do business with. With the right approach, you’ll be able to intelligently decide if you would like to purchase direct liquidation or from a wholesaler.
You’ll also want to determine what sort of products you want to buy. Is there a certain type of merchandise you would like to market (kitchenware, clothing, smart electronics, etc.)? Is there a specific condition that you like to specialize in, like new items or refurbished items? Remember that when you’re new to the industry, it’s much safer to stick to brand new goods as they are typically easier to resell.
Step #3: Consider a partnership
For certain individuals, partnering with a mentor or someone with a similar career goal may be the best way to dive into the wholesale liquidation industry — but for others, that may not be the case. If you feel that you need support with launching and running your business, consider recruiting someone to help you along the way.
The only time you can bring on a business partner who will either invest in your company or manage the company with you is when you are completely certain that the person can be an outstanding and wholly helpful asset to your business. Your partner shouldn’t just be someone tagging along. Choose someone who is genuinely invested in building success together.
Step #4: Get the training and expertise you need
You must get the requisite training and guidance before you launch your business in any capacity. This is especially true of new in the wholesale liquidation sector and doesn’t know a lot about it.
Using online resources, you can find everything you need to know from business strategy books and advice from successful entrepreneurs who have set up their wholesale liquidation companies and are reveling in massive revenues. Should you choose to go into the business without any preparation, the odds are highly likely that your overall performance will be substantially smaller than what you might have wished for.
Step #5: Finance Your Business
When it comes to funding your company, the first line of action is to decide whether you plan to enlist a partner or an investor’s help. However, you should still go for other choices if you aren’t too enthusiastic about finding a partner.
Alternative options like refinancing your house, using credit cards, and choosing supplier credit are just a few approaches you can explore to begin financially supporting your company. Most new business owners also turn to crowd-funding, angel investing, and venture to invest to launch their business’s first phase.
Step #6: Register Your Business and Sort out Taxes
When establishing your new wholesale liquidation company, you must name it and register it with the state. For legal purposes, you must ensure that your company is registered with the appropriate agencies, regardless of your corporation’s type or name, so that any degree of misunderstanding or mistakes do not occur later on.
It would be best to get your taxes straightened out and prepared as business taxes are far more complicated than your average individual income tax. You’ll be required to obtain a tax ID and register for state and local taxes.
Step #7: Build a network
The key to creating a successful clientele network is good to conduct and genuine relationships with people within the wholesale sector. The goal is to create strategic partnerships with long-term income-generating persons. Not only that, the objective is to build amicable ties with your suppliers and your workers as well. This will provide you with attractive agreements, improved rewards, and strengthened experiences in the future.
Step #8: Market your business
While running a successful company is the goal, if you’re not quick to optimize how efficiently your operations run, it’s unlikely that you’ll see the profit margins you desire within the scope of time you’ve estimated. One of the key facets of optimizing efficiency is pouring your efforts into marketing. How will people know about your business? Ultimately, if no one knows about you, you’ll find it incredibly difficult to gain customers’ interest in a sea of online resale businesses.
There are a few essential but vital steps you need to take before establishing your wholesale liquidation brand. With this guide, you’ll quickly find that your business and market profile can not be developed overnight. Doing so requires time, patience, determination, and grit. Plan now so you can reap the rewards later.
Samantha Rupp holds a Bachelor of Science in Business Administration. She is the managing editor for 365 Business Tips and runs a personal blog, Mixed Bits Media. She lives in San Diego, California, and enjoys spending time on the beach, reading current industry trends, and traveling.