The Art Of Negotiating Closeout Deals And Overstock Inventory
Many people believe that negotiations are "all or nothing," and that there has to be one winner and one loser. Nothing could be further from the truth. While the goal of negotiation . is most certainly getting what you want, the fact is that the best deals (the ones that stick) incorporate terms and ideas from both parties. Businesses that specialize in buying closeouts and overstock for liquidation sale or other inventory reductions understand these principles In this article, we'll provide some tactics and tips that good negotiators use to get what they want. These suggestions may be used in virtually any negotiation process, whether you are working with a business shutting down their 3PL warehouse, or just liquidating excess inventory due to slow sales or too much inventory in the warehouse.
Before entering any formal negotiation, it is important for an individual to think about what they want to achieve from the closeout process. To that end, it makes sense to put on paper specific goals or desirable outcomes. Be optimistic. Ask yourself what would be a "home run" in your closeout or overstock inventory deal? This could be as simple as the other party conceding entirely to your wishes. When a business has a liquidation sale they may be getting rid of dead stock that has been paid for a long time ago. In this case, they are not trying to recoup their costs, and they just want to get rid of the overstock inventory.
Next, individuals should identify several fall-back positions that they'd be comfortable with that would still get the deal done. The idea is to have thought out as many scenarios as possible. Closeouts are only a good deal when both the buyer and seller are happy, and if the seller is shutting down a 3PL warehouse it is best if they can reduce their warehouse fees but getting the closeout process completed as quickly as possible. The less time it takes to make a deal on closeouts, the faster the seller can downsize their warehouse or completely shut down their 3PL warehouse.
The next task should be to identify (or try to identify) any potential weaknesses in the opposing party's position. For example, if in a real estate transaction, one party knows that the other party has to sell a certain property or face a liquidation situation. This is valuable information that can be used in negotiation. Identification of weaknesses is important. That's because it might allow the party that has done its homework to capitalize on the other party's weaknesses and turn negotiations in its favor. At the very least, help both parties to identify an area of middle ground better. Another pre-negotiation exercise — and it is something that most people don't do but should — is to come up with a list of reasons why their proposal would also be beneficial to the opposing party. For example, if a business is shutting down it's 3PL warehouse and having a liquidation sale, the ultimate goal is to get rid of all closeouts and excess inventory as soon as possible, The logic is to bring up the key points of this list in the actual negotiation in the hope that the points will advance the cause and/or help to identify some common ground.
Again, using real estate as an example, perhaps one party (in this case a closeout company) could argue that its bid for a particular property is more favorable than others (even though it's lower in terms of dollars) because it is an all-cash offer, as opposed to a riskier financing or a stock swap. By explicitly pointing out the advantages to both parties, the negotiator increases the odds of getting the deal done.
When a business is in need of getting rid of overstock inventory, the best thing to do in a negotiation is lay all the cards out on the table, and explain they are closing a warehouse and must sell. This makes the closeout process easier because the buyer for all your closeouts understands the timing.
Haggling, also known as bargaining, is a form of negotiation two parties engage in when trying to come to an equitable agreement for the price of goods or closeout services. In most parts of the world, haggling is a way of life. It’s not as popular here in the United States as it is in other countries, but that’s quickly changing. It may have taken us a bit longer to catch up to Europe and the rest of the world, but Americans are beginning to realize the advantages of negotiating for a lower price. Closeout buyers often make offers less than the liquidation asking price because overstock inventory only sells if it is cheap enough. The closeout process is a lot like an auction where there are a limited number of buyers willing to pay a price.
In addition to your online research, take the time to visit similar stores in the same areas and ask questions about your item. Hopefully, you can find a chatty salesperson who will give you vital information. For example, perhaps the item hasn’t been selling well lately, or there’s a glut of inventory on the product. Any amount of information, no matter how insignificant it may seem, can help in your negotiations. Also, plan to negotiate at the right time of the year. If an items you seek are seasonal, closeouts, look to buy it at the end of the season because it will sit in the warehouse collecting dust.
Another great time for negotiation on most products is right after Christmas, when the holiday rush is over and stores have seen an increase in returns. Especially if you’re willing to take an open-box item, you have a higher chance of scoring a lower price on these closeouts. In most cases, the prices in large department stores are fixed, whereas smaller stores and family-owned shops are more conducive to haggling. The same principle applies to service industries. For example, you probably won’t be able to haggle with the man from the cable company, but self-employed contractors are more likely to be open to a bargain. If you are closing your business, shutting down a warehouse or liquidating a 3PL warehouse, you may want to go online and try search terms like closeouts, liquidate merchandise, sell dead stock and inventory buyers.
Even if you do have to whip out your phone to catch a salesperson with an unverified claim, be prepared to do so without ever abandoning your pleasant, relaxed demeanor. If you’re nervous, edgy, or stressed and confrontational, the salesperson will pick up on this and be more likely to clam up without giving you a deal. If you have a hard time being charismatic while handling difficult or confrontational conversations, ask a friend to help you practice by role playing different scenarios. Pretend you are buying closeouts from an Amazon seller shutting down their warehouse. Or pretend you are liquidating inventory from a 3PL warehouse that is closing. These are both good exercises for closeout buyers and liquidators.
Have a budget in mind when you leave the house, and once you leave the house, don’t alter it no matter how much terms may shift during the liquidation process. If the salesperson makes an offer that’s above your budget but sounds too good to resist, ask if you can come back the following day after running the numbers against the rest of your expenses. If they say no, that’s a sign the deal may actually be a trick in disguise and you’re better off turning it down. Verify whatever closeouts you are buying and carefully review your offer to make sure you will make a profit. If you are buying someone elses dead stock there is a reason they couldn't sell it. This just may be because it was overpriced and they didn't understand the best way to market it. But it also may be old inventory nobody wants. This is where the closeout process is not always the same and you have to know what you are doing.
You may not be able to get a salesperson to come down on the price of an individual item, but if you’re interested in more than one purchase, you may be able to get a lower price by bundling them. Often, the opportunity to sell two or more things can incentivize a salesperson to lower the individual prices of each item slightly. Buying bulk closeouts and liquidating entire inventory is usually more profitable.
Merchandise USA is a closeout buyer specializing in liquidations of toys, housewares, sporting goods, home décor and all consumer closeouts. We buy from Amazon sellers shutting down operations, 3PL warehouse downsizing or closing down, and other businesses liquidating inventory for any reason.
