This year Merchandise USA will be in business 37 years. I am grateful for and thank all of our customers and vendors for their loyal support. It’s been almost 40 years and the overstock buying and closeout business has changed more than I can ever tell you. Closeout brokers and liquidation companies have started, failed, struggled and flourished. I have seen my share of companies come and go, but there are still some closeout companies that have been with us since the very beginning, and to them I would like to give special thanks. Liquidation companies are run by a special breed of people. I want to congratulate them on zigging and zagging their way through years of profound change.
If anyone is thinking of starting a business that buys and sells closeouts, they should be prepared to deal with all the obstacles that come their way. When you buy overstock and work with other closeout brokers and liquidation companies t is rarely ever a smooth ride. Closeout companies are forced to deal with other businesses slow moving inventory and excess merchandise. Often it can be challenging to re-sell old stock or unwanted inventory that has been put aside as closeouts or abandoned in 3PL warehouses.You will have to persevere and push through all of those challenges.
I remember when we first started and it was a fragile business like all startups probably are, we were always worried about whether we had enough money to pay bills and whether we were doing the job right. You have to cope with all the ups and the downs. One of the main problems that startup liquidation companies and closeout companies face is regarding their finances. Many startups rely on investors financial backing and even then require a few years before making a profit. When the profit increases, so do your expenditures. If you buy overstock inventory and excess merchandise this will require large amounts of capital for cash outlays. You will be buying old inventory from businesses that are shutting down 3PL warehouses, liquidating inventory and having closeout liquidation sales. These sales require immediate action and large cash purchases. You will need to manage your cash flow for digital solutions, software programming, product development, and so on. This is even harder to do while startups try to keep a tight leash on the cash and avoid unnecessary spending.
As the economy continues to improve and things loosen up, it seems we are seeing more signs of what the closeout business used to be. Happier customers, better orders, more exciting closeout deals, and more liquidation opportunities. It makes me feel good to do business with closeout companies that started in business at the same time I did; I know we share common war stories and fought similar battles. But most of all, I can appreciate everything liquidators and companies that buy overstock have gone through to get where they are. Because I traveled down the same road.
The hours, the work, and the constant pressure to perform wear on even the most passionate individuals. Liquidation companies and closeout companies have to constantly deal with changing market conditions, changes of suppliers and buyers, supply chain disruptions, political policy changes and much more. Many businesses that buy overstock—even successful ones—get stuck with the owners working much longer hours than their employees. Moreover, they fear their business will stall in their absence, so they avoid taking any time away from work to recharge.
Fatigue can lead to rash decisions about the business, including the desire to abandon it altogether. Finding a pace that keeps the business humming without grinding down the owner is a challenge that comes early (and often) in the evolution of a small business. Closeout brokers have to be part buyer and part psycho-therapist as they often work with businesses that are closing, shutting down 3PL warehouses, liquidating closeout merchandise on a large scale, and going out of business and liquidating everything. When a company has too much inventory in the warehouse it must liquidate and this can be an emotional problem for many owners who try to avoid losing money at any cost. Often the cost is high, because they let old inventory sit too long in the warehouse until it loses all value. It is always better to sell closeouts for something and at least recover some of the money.
Even when a business is not founder-dependent, there comes a time when the issues from growth seem to match or even outweigh the benefits. Whether a closeout service or a product, at some point, a business must sacrifice to scale up. This may mean not being able to personally manage every client relationship or not inspecting every closeout that comes in. Closeout brokers are often “one man shows” where the owner is doing everything from sourcing excess inventory to loading and unloading trucks.
Unfortunately, it is usually that level of personal engagement and attention to detail that makes a closeout business successful. Therefore, many liquidation companies and wholesale liquidators find themselves tied to these habits to the detriment of their development. There is a large middle ground between shoddy work and an unhealthy obsession with quality; it is up to the business owner to navigate its processes toward a compromise that allows growth without hurting the brand. Selling dead stock is a necessary part or running every wholesale closeout company.
Merchandise USA specializes in buying and selling overstock, closeout and wholesale liquidations. If you are interested in buying overstock closeouts we have one of the most diverse lines in the industry; if you are interested in selling your overstock, unwanted inventory and closeouts, we are among the most experienced in the industry.