However, to prevent the liquidator from selling things marked up too high (and thus losing money), they are required to fill out an inventory sheet so that you know what is being bought and sold. But, a liquidation company can buy this normally marked up merchandise from JC Penney’s, mark it up 50% more than before, then sell it back to them at the much higher price. This means that, for example, a 50% off sale will be going on, and the same will be true for garments and such. For example, a popular department store like JCPenney might need to get rid of some excess inventory before it can stay afloat. Smaller liquidators will even accept candy spilled into the bottom of a vending machine in order to make extra money! Money can I make as a liquidatorĪ lot! Liquidations can earn some great profits if done correctly, especially in the name brand industry. Typically, liquidation companies will only accept name brand merchandise. Not surprisingly, this depends on the company. As a result, much of the surplus inventory that could otherwise be sold is simply thrown out to other companies for pennies on the dollar! Kind of merchandise is typically sold in a liquidation sale Companies that go under must try to sell everything they own in order to stay afloat and continue paying back indebtedness. This can be done at any time, but it generally happens when the economy gets bad. In this article, we’ll cover what liquidation is and how a retailer can profit from it in order to stay afloat! LiquidationĪ liquidation occurs when the store sells its own inventory, thus removing the cash from the store’s profit and loss statement. The use of retail stocks to avoid bankruptcy is a common practice today in the wake of the recession. This article will discuss the strategies used by these stores, and how they can be profitable. However, many retailers will stay afloat by liquidating their name brand stock before they go out of business. Many times, liquidations are a store’s last resort to avoid bankruptcy.
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