Surplus Merchandise Dealer.

Surplus Sales

We are in this type of business now. You can visit our web site at www.halfpricesurplus.com

I like surplus sales because the mark-ups are very good. You do need money for inventory, as this is a cash business. You will also need storage space, a truck, and a trailer.

Start by going to industrial or commercial auction sales in your area of the country. Bidding on anything that is cheap. Move the items you buy to a storage facility, and then run classified ads in the local papers to sell the Items. It is that simple of a business. You can also sell your items on E-bay, from your own web site, at flea markets, and if the merchandise is new, at trade shows.

I run my surplus sales as a part time business business. My Surplus sales last year were $34,564.00 at a 75% profit margin.. I attended six auction sales last year and work at my surplus business about 1 hour a day. Maybe 12 hours a week. That comes to less than 50 days of work a year for a gross profit of $25,923.00. My expenses are about $700 a month, (mostly warehouse rent), That leaves me $17,523.00 profit, or $350.00 for everyday I worked at it.

I do have $25,000 invested in inventory and it took me a few years to build up to that level. I now sell everything on line or at the flea market booth we currently operate. I could make a very good living on a full, or part time basis if I sold using every means possible. What if you started a part time surplus business, took the profits each year and used it as a down payment on a rent house. After five years, you would be well on your way to becoming wealthy.

Expertise:

You will learn as you go. The more auction sales you attend, the more you will learn. Talk to the other bidders, they all have knowledge to impart. If you only buy the low priced items, you will find it difficult to get hurt. Check our web site, www.halfpricesurplus.com, for an idea of what we buy and sell. We are not experts in all the different product areas, but we bid low enough that we can sell cheap. We are really sell low prices that products do not matter.

You can sell almost anything if you are selling at a low enough price. If you start with larger items, it will be easier to sell them using classified ads. At one sale I purchased seven glass display cases for $375.00 and sold them two weeks later for $1700.00 using a classified ad. Anther time I bought three kiddie coin rides for $350 each and sold them for $600 each. I only bought three rides because I was a little scared of getting stuck with them, only later did I find out that I could sell as many as I could get. Next time I will know.

Finding Auction sales:

I check for auction ads in large city Sunday newspapers. I pick cities within one day's drive of my home. After you start visiting auctions, you will be put on the auctioneer's mailing list. Also check the Internet for auctions.

Be polite, courteous, and always leave your business card with the auctioneer. You will find it will pay off in the long run. At some auctions I can write checks when they normally do not take business checks without a bank guarantee. I have been called by auctioneers after the auction to bid on lots that were not paid for by another bidder. I have also been offered sole bidder deals when the auctioneer needed to have a problem resolved for a client of his. It pays to be nice and helpful.

The Best and Worst Auctions:

There are auctions for every imaginable product line. The best auctions are industrial, IRS, closed businesses, or bankruptcy auctions.

The best auction sale days, from your point of view, are weekdays. The worst are Saturday and Sunday. On Saturdays you get local users rather than resellers, and prices tend to be higher. The worst auctions are schools, and police department auctions because the merchandise is most often in poor condition.

The best payment methods, from your point of view, is cash due the day of the auction. When the auction takes credit cards, prices are higher as bidders can bid more than the amount of cash they have on hand.

The best terms are no reserve, and no premium. The worst terms are reserved prices, (set opening bid prices, or set lowest acceptable bid), and terms of 10% buyers premium as people forget about the premium and that makes prices higher.

The best sized sales lots are large lots, (a lot of items sold all at once), as there will be fewer bidders. The worst is small lots. Small lots take longer to sell and more bidders can afford to bid.

The Best Items:

The best items are large items like, glass display cases, printing equipment, vehicles, tractors, etc... anything large. The reason is fewer bidders, and your sales price can be high enough to leave a good profit after advertising and moving cost.

Selling What You Buy:

I use classified ads and my Internet web site listed above. You can also sell at flea markets, garage sales, and by selling to businesses by sending out faxes. And you could always use E-bay.

When I get a lot of flea market merchandise, I print a flyer and drop them at every both in all the flea markets in my area. Flea market operators are always looking for items to sell. I recently purchased 270 cases of assorted Dollar Store goods, (from a closed bankrupt store), at an auction for $8.00 per case and sold most of it to flea market operators at $20 per case.

Pricing & Profits:

I price items at whatever I think is fair. I usually set my price at one half of what the retail price would be, or less. I check the web for selling price comparisons by searching for an item using the Google.com search engine. In order to sell at bargain prices, I try to buy items at 10% to 20% of what the retail price would be. I set the sales prices at double to four times my cost. By keeping my profit margins high, I can afford to hold the items in inventory as long as necessary and dump my mistakes by selling them at my cost.

Other Observations:

Having a large number of bidders at an auction sale does not mean much. Some people will not bid at all, and some people are there to bid on only one particular item. A clean, neat sale is a sign of high prices to come.

Hang around until the end of the sale. I have seen many bargains in the last half hour because people ran out of money, or left. Do not be afraid to bid, you can always quit when the price goes too high.

Never be afraid to walk away from an item. There will be another sale, another day. You only make a good profit by buying cheap and selling at a fair price.

If you do not make a few mistakes, you are being to conservative and missing deals.

How the Internet assist this business: The Internet allows you to use smaller classified ads, and direct people to a web site for more information. The Internet gives you a way to find out who is holding auctions in your area. With a web site, you can sell to the world at a very low cost.