A secret to success for small retailers: Customer returns liquidators and Costco

Ask and receive; it might be as simple as that for many businesses to land a contract with Costco. It is fundamental to smart business practice, and retail giant Costco relies on savvy go-getters to contact it with proposals as it decides with whom to conduct business.

That’s how many liquidation wholesale suppliers take in Costco’s overstock and customer returns liquidations. Two different things, but the smart small retailer will know the secret to working with both.

Costco has two forms of unwanted merchandise. The first is overstock, or having more of a product in stock than is being sold in an area. The second is customer returns liquidations, or the merchandise that customers return to the store as damaged or unwanted. A wholesale liquidator might take either or both types of unwanted merchandise through a contract with Costco.

Customer returns liquidations are less expensive to take than overstock for a wholesale liquidator. That’s because as a rule, returns could be damaged or otherwise more difficult to sell while overstocks are most likely in pristine condition.

Don’t be fooled into thinking that it’s as easy as picking up the phone, scoring a liquidations contract with Costco and bypassing wholesale liquidators. Having a contract with Costco and taking on its unwanted merchandise requires a retailer to have plenty of cash on hand and a significant amount of storage space. Garden equipment, large outdoor toys and home entertainment products aren’t the types of merchandise the average retailer can stock in a storefront or in a stockroom.

Instead, it’s best to work in conjunction with a wholesale liquidator. The wholesale liquidator not only scores the contract with Costco, it stores the merchandise and lets a small retailer know what merchandise is available ahead of time; in a word, you pick and choose.

Wholesale liquidators could be the secret to success for small retailers and home business owners; liquidators contract with Costco, process the merchandise, store it and still sell it to you for cheap.