Wholesale Closeouts: A Win for Wholesalers, Retailers and Consumers
04 Mar 2015
Wholesalers and retailers both seek to unload back inventory at discount prices, but each does so for slightly different reasons. Retailers frequently throw fire sales or closeout because of a change in location. Sometimes retailers throw fire sales because they're in the process of filing for bankruptcy and are committed to liquidation.
Benefits of Wholesale Closeout
Wholesalers, on the other hand, more often closeout certain inventory to make room for newer products or changes in consumer tendencies.
Retailers respond to these changes in consumption, which could be related to market saturation or tech turnover, and place bulk orders on fresher products from wholesalers. This can, in turn, require wholesalers to change their game plans in mid-stride and unload their inventories at huge discounts.
Sometimes wholesalers seek to unload back inventories in order to make way for new products. Changing consumer trends and quick tech turnover will lead more wholesalers to closeout whole swathes of their inventories to make room for new order placements from retailers.
Market Mechanics of Closeouts
Closeouts, though, are typically a win-win-win for wholesalers, retailers and consumers since each profits in a way that they might not otherwise sans unloading back inventory. Changes in consumer tendencies instantly incentivizes some products and leads to devaluations in once-popular goods and services.
Wholesalers can swing with the changes and unload their (otherwise unsold) inventory to retailers while retailers can sell potentially out-of-season goods to consumers at discount prices. Everyone, in essence, comes away a winner.
Oftentimes wholesalers can overstock on goods that they mistakenly thought would be more valuable later. Let's face it: Consumer tendencies can be fickle, and picking a winner isn't always a slam dunk.
In instances of overstock, however, wholesalers might liquidate huge sections of their inventory to retailers eager to fill their own warehouses, bide their time and make modest profits off a wholesaler's previously liquidated back inventory.
Room for Warehouse Operators
There's even a fledgling market for warehouse operators looking to work with the trifecta of manufacturers, wholesalers and retailers. These warehouse operators are purchasing excess, discontinued or (for whatever reason) liquidated goods from wholesalers to later move them at discount prices.
There's now a viable market for wholesalers to transact old inventory with these wholesale operators. More advanced supply chains and logistical support brought about by the latest analytics technology could make wholesales more apt to take risks in coming years with the foreknowledge that they could ultimately sell unwanted or discontinued products to warehouse operators later.
Warehouse operators are so keen to do business with wholesalers with excess inventory partly because warehouse operators intuitively understand that there's money to be made in hugely discounted products. Moreover, consumers are empowered to search through websites like TopTenWholesale to find great deals on out-of-season or liquidated clothing goods and outmoded electronics.
Wholesalers often sell to warehouse operators who sell an eclectic carousel of goods to consumers at uniformly low prices. There are some trends in the types of products that are sold, however - Christmas-themed gifts after the holidays and candy after Halloween, out-of-fashion toys and books, and school supplies past October are some examples of typical bulk orders placed between wholesalers and warehouse operators.
Summarizing Wholesale Closeout's Benefits
Purchasing merchandise on the second-hand market can be done in an ethical way that benefits all parties.
Wholesalers benefit by unloading overbought or suddenly out-of-vogue products while retailers and warehouse operators benefit by picking up the wholesaler's inventories at bottom-basement prices.
Ultimately, though, the consumer wins as well by getting a wide selection of electronics, clothing and everything in between at great prices.