How Wholesale, Liquidations and Store Returns Work

How Wholesale, Liquidations and Store Returns Work

Posted by Big Brand Wholesale on 9th Mar 2020

Wondering how wholesale works or where liquidations come from? Here's a super simple picture guide for you! Let's begin!

Merchandise is produced in a factory

The factory usually doesn't sell merchandise directly, so they hire someone to sell it for them.  This is a "Distributor"

The distributor gets the factories merchandise into stores.  The merchandise is sold to stores at wholesale prices so the store can sell it and make a profit.  The merchandise is usually sold in cases or "case packs".  A case pack is usually 24 to 96 pieces in one specific item, in one specific size, but sometimes cases are larger or smaller.

The stores sell the merchandise to customers at "Retail Prices". Retail prices are the full price of the item.

But the store usually doesn't sell every single item. There is almost always leftover merchandise.  Usually the store puts this on Clearance.  After 1 - 3 weeks of clearance the store has to remove these extra items to make room for new items.   

The store then Liquidates the extra items to companies like We then sell the liquidations to small business who are seeking an extra deep discount on merchandise so they can resell it.  Read our Complete Guide to Different Types of Liquidations to learn about Quality Variations.

Sometimes a customer Returns an item to the store; this is "Store Returns". Store returns usually occur because the customer doesn't like / need / want the item but it can also occur because there is something wrong with the item.  We also buy some store returns too.

And lastly, there are also Overstocks. Sometimes the store has full case packs that never made it to their showroom floor.  This is because stores usually order more than they plan to sell.  We love purchasing Overstocks also!

NEXT:  You gotta Read our Complete Guide to Different Types of Liquidations to learn about Quality Variations so you know what CONDITION to expect when you buy Liquidations, Store Returns and more!

Love this guide? Check out our other Amazon & eCommerce detailed guides:

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