Low Gas Prices = Strong Retail Sales. Good News For Closeout Buyers And Inventory Liquidators?
Volatile gas prices have taken center stage in the media as the national average for a gallon of regular gasoline has experienced wild prices swings over the past few years. In the past, geopolitical tensions, hurricane seasons, flooding in the Mississippi, and increased travel demand during the summer driving season were forces pushing prices higher. Closeouts sell better when consumers have more discretionary income in their pockets. They may shop more on closeout websites and have an appetite to buy liquidation overstock and other surplus inventory. At the individual level, higher gas prices mean that each of us pays more at the pump, leaving less to spend on other goods and services. But higher gas prices affect more than just the cost to fill up at the gas station; higher gas prices have an effect on the broader economy. If prices get too high it can affect consumer spending to the point where importers and wholesalers experience slowing sales and build up excess inventory and other closeouts.
Inversely, when gas prices fall, it is cheaper to fill up the tank for both households and businesses, and really eases costs on transportation-focused industries like airlines and trucking—but it also puts a damper on the domestic oil industry. In general, higher oil prices are a drag on the economy. Here we will focus on some of the direct and indirect negative effects of high gas prices. Both cycles affect wholesale business activity and have a direct impact on companies when they sell surplus inventory. As costs increase and the economy slows, there is more liquidation overstock accumulating in businesses warehouses, resulting in increased activity in selling closeouts, overstock and liquidating Amazon inventory. Businesses may want contact closeout brokers to sell surplus inventory during an economic slowdown. Surplus inventory liquidators have connections with discount sellers who specialize in handling overstock liquidation sales. They may turn to overstock buyers who operate closeout websites and process liquidation stock for sale.
When gas prices rise, it can be a drag on the economy—impacting everything from consumer spending to the price of airline tickets to hiring practices. Gas is an important input for transportation, which directly impacts households as they drive, but also businesses that rely on logistics and transportation chains around the globe. One of the best ways to keep your inventory in line is to manage liquidation stockregularly. If you have to sell surplus inventory and other closeouts it is best to deal with the problem before it gets out of control. When discretionary spending is hampered by higher gasoline costs, it can have knock-on effects throughout the broader economy including retail stores, closeout wholesalers and even Amazon FBA sellers and closeout websites.
A side effect of high gas prices is that the discretionary spending of consumers drops as they spend a relatively larger portion of their income on gasoline. This means less money is available for buying overstock inventory and liquidation stock from discount stores. Higher prices also mean that shoppers will tend to drive less—including places like the mall or shopping centers to stores selling excess inventory, like Dollar Tree and Walmart. Indeed, academic and industry studies provide support for this, showing that driving miles are directly tied to gas prices. This also contributes to the increase in online purchases for
liquidation inventory, excess merchandise and overstock. Amazon sellers may see an increase in business as shoppers buy more online, but there are still a lot of Amazon sellers closing down FBA stores and shutting down 3PL warehouses due to high storage fees.
While shoppers may not drive, they do switch to online shopping more when gas prices rise. According to Marin Software, searches for online shopping increase dramatically along with an increase in gas prices. Consumers may increase searches for excess inventory, closeouts, buy liquidation inventory and sell your excess inventory. However, all retailers are further squeezed as they are forced to pass on the higher expenses they also experience, which are associated with increased shipping costs to consumers. Anything that has to be shipped or transported—from apples to electronics—could cost more as gas prices rise. This is especially true for products, or components for products, that are manufactured overseas. Likewise, many products that contain plastics or synthetic materials are based in part on petroleum and refining. Higher oil prices mean higher prices for these materials too. As prices rise, demand falls, and businesses may have to work harder to find closeout buyers and inventory liquidators who can purchase excess inventory. It can be more challenging to liquidate business inventory when gas prices are high and consumer spending is down.
Businesses should sell surplus inventory both during good times and bad. Letting old inventory sit idle in your warehouse is a bad idea because it becomes less valuable and costs more money. It is always beneficial to turn old inventory into case by getting rid of closeouts and excess inventory on a regular basis. If you wait too long to unload old stock to excess inventory buyers, you may find there is a diminished market for your products. Sell liquidation inventory before it gets too old and buyers don’t want it anymore.\
Merchandise USA buys wholesale closeouts and overstock wholesale toys and excess inventory of housewares, home décor and other obsolete inventory. Our customer base of closeout websites and closeout brokers is extensive in the United States, Canada, South America and Central America.
