If your business model on Amazon or Walmart is based on wholesale, closeouts are like provisional gold mines for you. However, it is always of utmost importance to know A) what closeouts are, B) where to buy them, and C) how many of them to buy. Let’s talk about these things and some related material a bit more.
A) What are closeouts?
There are two types of products that you can purchase and resell:
a. Regular Products: The ones that are selling right now.
b. Opportunity Products (Closeouts): They are the only remaining QTY (quantity) of a product that a distributor/manufacturer is planning to just get rid of because of reasons such as a new model hitting the shelves, changing business direction, etc. So, it is a one-time deal and there is no restocking for it. It is a product that has reached the end of its sales life cycle and as a result, you – most probably – have the lowest amount of competition in proportion to the demand. They are much less expensive. Sometimes they are just a last year’s model. This means that they may hardly be any different from the newer model.
There are two important factors you should be sure about before purchasing a closeout:
1. Closeout products are brands.
2. They are brand new.
B) Where to buy closeouts
One famous closeout website is: www.closeoutcentral.com
CloseoutCentral is one of the best sources out there. They introduce closeouts from different suppliers and you can subscribe to get daily closeout alerts via email from them. However, you are less likely to find branded products between their introduced lots.
www.wholesalecentral.com is another famous closeout player from which your chances of finding branded products are higher. Below, you can see the procedure through which you can find and buy some good closeouts from WholesaleCentral:
Before you start:
● Do not pay attention to the featured stuff listed on top of the non-featured ones.
● For the products that you are searching for, check out its provider’s website.
● After you look through the product page, its expiration date, and other related info, it is time to check the same product on Amazon. Make sure Amazon is not selling it and everything is OK; if so, then you may buy it.
1. In the first phase of your search, in the search bar of the website, type some brand names that you know. If you find the closeouts of brand names, awesome! Go for it. Otherwise, don’t give up. Your second phase of search starts.
2. Click on Advanced Search.
3. Choose a Category (can be set as Closeout Suppliers).
4. Choose the location > United States; if you are there!
5. Type of Supplier can be set as all by not selecting any of the categories on the dropdown menu.
6. Merchandise Type can be Midrange or any of the other three categories. Below, you can see a sample of the Advanced Search dropdown menu.
7. By clicking SEARCH and advancing to the results area, forget about the featured ones which are listed first (as mentioned before) and dive deep into the other website names listed lower on the webpage. The image below shows part of the long list of the websites I got from the search.
8. You can click on any website’s domain name listed in the results area to be directed to their website.
● Look to see if they sell brand name products. Avoid sites where everything is unbranded.
9. If you find the brand stuff there, open an account with their website.
C) How many units to buy:
Before knowing how many to buy; first, figure out if this is a real closeout deal or just a mirage. Sometimes, some distributors advertise a product as a closeout and they swear that they are the last 875 units remained for the SKU and if you buy them all, you will be the owner of the market for that product. But when you buy that closeout, you see that there are a dozen other sellers all having 875 in their stock and all of you want to be the hero in that market and it ends up as a tragic loss for almost all of the sellers. The question is ‘how can you know that this is a real closeout?’ and more importantly, ‘how can you know that the supplier is sincere?’
To answer the first question, I must say, you need to do a thorough research. Not only do you need to check Amazon, but you also need to google it and make sure there is no other retailer that sells this product as strongly and profusely as before. It is crucial to check the product’s life cycle on Amazon by some software such as Keepa or CamelCamelCamel. Make sure that this is the end of its life cycle. For a good product, it takes at least 3-5 years to hit the end of life cycle. Also, you want to look at the sellers of that product. Use some software such as Jungle Scout or AMZscout Stock Stat to exactly figure out the inventory stock of the present sellers of that product. I bet you do not want to get into a war with a giant seller with 999+ products in stock that has been selling the product forever.
But the second question: How can you know if the supplier is sincere? Well the short answer is: ‘YOU CAN NEVER KNOW’. It is mostly dependent upon the rapport which is built in your relationship with their sales rep. The longer the relationship with a supplier, the higher the chances of getting the best deals. Many suppliers provide the list of their closeouts once or twice a year. Make sure you evaluate their list and give orders first.
Note: Don’t let those distributors with email marketing of everyday closeout deals trick you. 99% of the times they are just mirages.
And finally, if you are sure that the product is really a closeout and there is a certain number of that product remaining to be actually sold out to you, according to your budget and business fashion and size, you may order for a maximum of stock which is enough for a 3-month period of sales. For example, if that product sells 300 units per month and there is one more major seller in the market, I recommend that you not buy more than 450 units.
I Hope you have learnt some good lessons about closeouts. You may contact us anytime with any questions or topics you would like to be answered.
Good luck in your business!