What are Liquidation Pallets? Definition and Guide

Suppose you’re starting your own liquidation merchandise buying and selling business or interested in getting into this kind of business. In that case, it’s important to remember that one of the most effective ways to make money in your wholesale sales is to buy merchandise by the pallet. We offer wholesale pallets of liquidated merchandise at Orotex Liquidation in Miami, Florida.

In your search for suppliers, you may have come across or heard about wholesale pallets offered through warehouse stores’ liquidation. However, you may not have paid much attention because you believe that only low-quality and questionable merchandise is provided, which is not the case.

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What are Liquidation Pallets?

Liquidation pallets are surplus merchandise from large retail stores or suppliers that must be quickly converted to cash. These pallets contain several items in the same category mixed in one pallet. Typically, a liquidation pallet consists of overstock inventory or customer returns.

Large retailers like Macy’s, Walmart, and Target are eliminating their surplus merchandise. These items take up significant warehouse space, and retail stores must remove them as soon as possible to make room for new merchandise. This is usually achieved by selling them in bulk pallet boxes through liquidators’ warehouses.

Numerous factors can result in customer returns, such as damaged or defective products, incorrect sizes or colors, dissatisfaction with product performance or quality, and buyer’s remorse.

This is how these top-level liquidators buy large retail store lots and sell them to resellers who purchase and resell these high-quality products at only a third of the typical wholesale cost.

Why are these pallets liquidated?

The usual assumption is that if the items are in good condition, they will be resealed and resold in retail stores. The truth is that while these items have been lightly used, or some are even unopened and still in their original packaging, they cannot be placed back on the shelves and sold as new because they become what is known as Stock B.

Different Types of Liquidation Pallets

These products are then packaged into liquidated pallet boxes directly by large retailers to be sold through their top-level liquidation partners, such as Orotex Liquidation, with different types of liquidated merchandise, including refurbished/restored products, liquidations, excess inventory, and customer returns.

Customer Returns

Customer returns are merchandise that was once sold and returned by the buyer. There are many reasons why these returns happen: the seller may have shipped the wrong product, the size may not be right, or the buyer may have had different expectations of the product. This happens in physical stores and especially in online purchases. According to the National Retail Federation, more than $816 billion worth of items is returned each year.

Excess Inventory, Overstock

Excess inventory or Overstock, on the other hand, refers to merchandise that retailers have overordered and never sold. Mostly, this is seasonal inventory that must be cleared out when the Christmas or Easter seasons end. This means that these items are new and still in their original packaging.

This allows you to buy high-quality merchandise in bulk from these liquidation stores at prices far below typical wholesale prices and potentially profit from resale.

Liquidations come in different forms, including the following types:

1. Seasonal Change: Stores change their inventory to reflect the season. For example, winter coats are removed from the shelves during the summer.
2. Seasonal: Christmas decorations are removed from the sales floor during Easter. Similarly, Easter merchandise is not sold during Halloween and other festive occasions.
3. Leftover Clearance Stock: Retail stores frequently change their product selection. Once a product arrives in a store, it follows a schedule. After a certain number of weeks, the price is reduced, and then it is eventually put on clearance and sold at a lower cost. The remaining stock is then liquidated to companies like OrotexLiquidation.com. This cycle is continuous, meaning new items constantly come in, and old items always go out.
4. Damaged from being in the store: Items often get damaged while on the sales floor. Customers may drop items, dent them, or get them dirty. They may also open an item to test it or even steal something. Additionally, customers may try on clothes or shoes and leave stains on them.
5. Discontinued – Items get discontinued all the time.  Brands like Revlon or companies like Victoria’s Secret are constantly making new items, so they have to discontinue items (if they didn’t, they would have the biggest catalog ever, which would cost way too much to make)
6. Customer Returns – As you probably guessed, a “Store Return” is when a person returns an item to the store. You may automatically think a Store Return must be awful, but that isn’t always true. There are several reasons people return stuff.