I've received a lot of questions about buying pallets lately, so I thought I might as well handle all the questions on a post. Since there's so much to talk about and I will definitely miss some things, ask follow-up questions in the comments below.
First and foremost, this post is not about where to find clothing pallets but rather what to look for in a pallet if you ever have an opportunity to buy one. Where I buy my pallets is information I keep within my small team and will never be disclosed. I don't do this to hold you guys back, I just know how much work it took and how much I paid to obtain this kind of information. With that said, let's get it!
When looking at a pallet, don't just focus on the good, it's more important that you focus on the bad. Here are some good and bad things to look for when examining a clothing pallet. I'll also include some pointers that aren't necessarily good or bad but you should always keep in mind.
1. When a pallet's price is based off of the MSRP price, understand that the MSRP price usually means nothing. Don't let the supplier use the MSRP price as a bargaining chip because the MSRP price has no relevance on what you can sell the pieces for. Think of it this way, most clothing in pallets are past their season and has been marked down dramatically from the original price. If that's the case then why is it OK for someone to use the original price as a tool to price a pallet? This is a common standard used amongst pallet suppliers but I usually look past that. I'm not telling you to NOT buy the pallet, I'm just telling you to not put that much emphasis on the MSRP price of the pallet.
2. If you're lucky enough to physically examine a pallet, don't base your decision on just the first top 10 inches of clothes. Seller's usually put the nicer pieces on top and the lower quality clothes on the bottom. REALLY dig if they allow you to.
3. If you're buying clothes, then buy clothes. Do not buy pallets with accessories or other pieces that are out of your scope. And within clothes make sure you focus on who your customers are. For example, I specialize in women's clothes exclusively, so I would decline a pallet if it has too many mens or kids pieces. Do not let the pallet dictate your market.
4. Ask about the damage rate (the percentage of damaged goods). Whatever number they tell you, just double it. Honestly, nobody is going to tell you the exact number and when they give you a number, they're lying. If they say it's 5%, then it's at least 10%.
5. Yes, the cost of shipping should be added to the average cost of each piece. I know this might sound obvious to a lot of you but I just have to say it. And if you're going to rent a truck or van to haul it, the principle still stands.
6. If a person you're buying from only has a few pallets for sale, understand you're not getting the best price. To me, that's a tell-tale sign that they're another middleman that's just trying to get their cut. There's nothing wrong with people getting their cut but if you're trying to get the best prices, you're not going to get it from them. Buy from suppliers that can supply you a truckload of pallets if you want the best prices. This is an important thing to remember so if I confused you, just ask in the comments.
7. Always ask for a manifest (an itemized list of everything that's inside the pallet). It's not a deal breaker if they don't have one, a manifest just provides you more info to make your decision.
8. If you're working with a new supplier, DO NOT buy more than 1 pallet the first time around. I got burned by 4 different suppliers before I found 3 that I can truly trust. Don't let them entice you with quantity discounts, just buy 1 and see how it goes for you. You'd be surprised how many unscrupulous sellers are out there. I literally bought 200 "pairs" of shoes one time just to find out that NONE OF THEM WERE PAIRS! Of course the seller conveniently forgot to mention this to me.
Again, I know I didn't cover everything when it comes to things to look for when buying a pallet; these are just a few of the important points that I can think of at the moment.
Watch Your Manners
When pallet shopping, understand that your relationship with your supplier is really important moving forward. Another obvious point but let me tell you a quick story that will open your eyes a little wider.
The supplier I work with for a while now time told me one time that he saves certain pallets for his customers that love to haggle prices. Needless to say, these pallets were not the best ones. He pointed to one section of his warehouse and literally, there were pallets lined up that were all low-quality pallets. I'm not telling you not negotiate, I'm just telling you to know where to draw the line. Believe me, if you're the type of person that always wants to win every dollar, you're going to get dealt with. A good supplier is not an animal you want to try your "bottom of the barrel" pricing with unless you're buying a truckload of pallets.
On the other hand, you should also know when you're getting a horrible deal. For example, I was offered a pallet at $12 per piece once for some Nordstrom pieces and got the seller down to $6. Even at $6 it still wasn't a good deal so imagine how I felt when he initially told me $12. If you're wondering, I passed on that pallet.
It All Comes with Experience
No matter what I tell, you're not going to get the full effect of buying a pallet until you do it yourself. You're going to have to buy a few to totally understand what to look for. By doing so, you'll soon find out that a lot of these tips will come naturally and you'll even develop your own tips. I know it can be intimidating at first because there are so many questions going through your mind but a good pallet seller will answer all your questions.
Will you get screwed, maybe. Just learn from your mistakes and keep pushing. I know that's a horrible way to end this post but that's the truth. Unless I'm there with you, I will not be able to fully assess your specific situation so use these tips as guidance and always use common sense.
Great info Dani! I haven’t yet ventured into pallets; however, I have bought several auction liquidation boxes filled with Nordstrom returns. Results have been okay, thus far. Each time I sold items from the boxes it has covered the my cost. One time, a Dior shirt covered everything I bought! Do you have any experience with Indigo Trading or Bulq? Thanks!
I haven’t tried Bulq but Indotrading price is a little high from what I see. Hope that helps!
Thank you for sharing with us! My question is of an extreme newbie, how did you initially research liquidaters? What type of keywords did you use?
Macy’s liquidation pallet, Nordstrom liquidation pallet, Amazon liquidation pallet and so forth. Also try “clothing lots” on craigslist and offerup. Hope that helps!
I appreciate you taking the time to tell us about your experiences. I have ordered pallets of shoes from 3 different places and clothing from 3 different places as well. I really enjoy reading everything you have to say in your blog. It can be very intimidating handing over thousands of dollars as someone new to wholesale, finding the right suppliers is what held me back for so long. Im always on the lookout for some new suppliers though. I agree about the MSRP, some wholesalers try to sell you using that point, making it sound like you can get half of that MSRP back when you resell the item. Yes that is true for some brands but mostly i dont see that happening.
Thanks for reading Kyndra! Yes it is intimidating at first but when you find an honest supplier, keep that relationship in good standing! Yes, MSRP is a BS selling point but it seems to get people all the time. I’ve become numb to that number because a $200 dress that’s damaged an not sellable will still be counted towards the MSRP.
You have amazing content. Have been doing lots of research on buying clothes on bulk from websites and liquidators, your post was extremely helpful.
It’s hard and time consuming to go to the bins or drive around town to find decent prices at a good price. Thanks for all the tips ?
No problem! Thanks for reading Bani!
Thanks so much for the information. I already got burned from liquidation.com. Basically bought a big box full of used and damaged items- lesson learned
Yea, certain places are the worst. I got burned too many times but it has made me so much smarter when sourcing.