How to Qualify a Supplier

Finding a reputable wholesale liquidator to work with can be a daunting task; there are hundreds of companies out there advertising all kinds of products but you may have heard a story or two that makes you leery of working with such companies. There are steps you can take to qualify the liquidation companies you find to determine if they are a good company to source from.

2. Buy from the source

In the liquidation industry, brokering merchandise is very common. Companies set up websites to sell other larger companies’ products. This results in many companies listing the exact same lots in several places on the Internet. While it is okay to purchase from brokers, it’s better to go straight to the source. How do you know if the company you are looking at is a broker? Brokers generally do not have their own warehouses or spaces. They do not own, see or touch the merchandise they sell. It gets drop-shipped straight from the supplier to the end reseller.

Does the company provide actual photographs or videos of their warehouse and operations? Do they list a phone number, email address and physical address? If you see a physical address on their site, Google it and use the “satellite” function to zoom in on the location. Does it look like an apartment building or a residence? Or does it look like a warehouse space?

If they do not list an address at all, consider that they might be “online only,” and thus not in possession of the merchandise they are selling. This makes it difficult for them to accurately describe it to you and difficult for you to make sure the goods will be right for your business.

4. Take note of their accepted payment methods

Most reliable, reputable suppliers will make it as easy as possible for their customers to purchase: they will make multiple payment methods available to you like credit card, PayPal, wire transfer, money orders, etc. Be wary of suppliers who require payment by wire transfer in 100% of cases. Paying for your purchases by Credit Card or PayPal gives you recourse in case a supplier does not deliver the merchandise. When you do wire money, make sure you’ve established a trusting relationship with a company as some dishonest suppliers may cash in on your wire and never deliver the goods. Although this is fairly rare, it does happen. Paying by Credit Card or PayPal (even though it occasionally means paying a 3-5% service charge), may avoid headaches in the future. Note that some companies only accept wire transfers for large amounts until a relationship of trust is established with their customers – this goes both ways. Do be flexible, but be vigilant as well. Do your research and know where your money is going.

6. Be realistic in your expectations

Many people who start out in the business of buying merchandise for the purpose of reselling it expect to at least double their money on every lot they purchase. This is simply unrealistic when dealing with liquidated goods. While it CAN happen, there is a learning curve and you need to allow for a little margin of error. When you find a supplier you’ll be working with for the first time, start small, test the waters and build your way up.