What the heck is Shelf Pull merchandise? Just as it sounds, shelf pulls are retail products that have been on display in a retail store and then subsequently “Pulled” from the shelf for various reasons. Big Box retailers will pull items from the sales floor for several reasons, including:
- End of season model/style
- Initially purchased too much of an item and therefor have excess unsold stock
- Product no longer being manufactured or distributed
- Product being recalled due to a safety hazard
Most of the time, retailers simply pull items from their retail sales floor to bring in newer items. Think about it, most stores rotate stock to keep their inventory looking fresh and new. Due to this reason, there is an abundance of merchandise which can be purchased on a wholesale level and resold for a great profit. There is no better way to “tap” into major name brands on a wholesale level. The great thing about buying shelf pulled merchandise is simply cost. often, shelf pull merchandise can be purchased for “pennies” on the original wholesale dollar!
Are you looking for name brand merchandise to resell on eBay or through your ecommerce store? Shelf pull merchandise can also be sold through your store front and exported throughout the world!
Ok, I have convinced you…I can tell. Where do you find Shelf Pull merchandise?
Shelf pull merchandise can be purchased through Wholesale Liquidators or buying directly from each department store. Some department stores have their own liquidation department where they sell pallets and truckloads of shelf pull and customer returned merchandise. Most big box retailers will contract a ‘Third Party” liquidation company to move excess or unwanted merchandise. In this case, dealing with this third party is considered buying direct.
There is this nasty little rumor going around that says importing small quantities of merchandise is something that is very difficult to do. But the truth is that you can get virtually anything and everything you want. If you want 10 sets of authentic Chinese medicine balls directly from China, you can get 10 sets of authentic Chinese medicine balls directly from China. Perhaps that is all your store needs and no one should tell you, “No, you can’t order that few although you don’t need very many.”
The main difference here is cost. Yes, it is more expensive to ship more items, but the bargain is greater the more you get. And yes, you get a better deal if you order more, but you shouldn’t order more than what you need or you are going to find yourself with an excess of Chinese medicine balls. This actually results in a greater loss for you than having to pay more in wholesale cost because you ordered less. You don’t want to find yourself with an excess of the item and not be able to sell it.
But what happens if a company says they have a minimum order?
How do you conquer that?
Well, even if a company says that they have a minimum order of 25 items and you only need 10, you can order what is called a “sample order.” A sample order is a way in which you can see how the item performs in your store. If it performs well, then you can order more later on. It is important to keep in mind that these companies doing the exporting will not turn down money. They are not going to say, “No, you can’t have this because you don’t need 25 of them.” Letting you order 10 is going to provide them with money they wouldn’t have otherwise. No good business is going to turn down the very cash that makes them grow. That would be counterproductive, don’t you think?
With a sample order you will pay more per piece, but you have the benefit of “testing the waters” before you order in large quantities. So don’t let anyone tell you that you can’t run the store the way you want to run it with the merchandise that you want to sell. Better yet, don’t let them tell you how much of your merchandise you can buy and sell. That is just right out wrong. If you want to order 10, go for it. If you want to order 5, don’t let anyone push you around. You’re the boss, so let them know that.
Most manufacturers realize that a small sample order can quickly turn into a larger order and then, of course, an ongoing trade relationship. A great resource to get started in importing is a site called Alibaba.com where there are plenty of worldwide manufacturers ready to ship in small quantities.
When you start a business, it is very important that you set up the proper legal structure for what you are doing. If you don’t, then you might find yourself sailing in the wrong boat. When you are sailing in the wrong boat, it is somewhat of a challenge to make your way to the right one.
So let us look at the different types of business legal structures that exist and what they are:
- Sole proprietorship – This is the simplest and most common of all of the legal structures. This is because this is a business that is owned by a single person and that person has unlimited liability. A person who provides services to another is a sole proprietor unless they decide to set it up as something else. So if you’re a contract sign dancer for restaurants and retail stores, you’re a sole proprietor.
- Partnerships – This is when two people decide to go into business together to make a profit. Each person owns a portion of the business and they also own whatever profit or loss that is made. So make sure you are going into business with someone who is in agreement or else you could see some trouble looming ahead. Some husbands and wives go into business in this way.
- Corporations – A corporation is set up through your state and your liabilities are limited. This means you are not personally liable for everything if trouble occurs. You do not become individually responsible for damages like you would through a sole proprietorship or a partnership. LLCs and S Corps are a part of this category. A corporation is considered a separate entity.
But wait. We need to look at this LLC and S Corp thing a little bit better. First of all, LLC stands for Limited Liability Corporation. The above definition more or less covers that. Your liabilities are limited. But what is an S Corp? Well, an S Corp is a corporation that is taxed under Subchapter S of the IRS’s Chapter 1. In other words, they do not pay income tax. Instead, they take income or losses and divide it amongst their shareholders. The shareholders then report the income or loss when it is time for them to file their taxes. So yes, the shareholders are fitting the bill.
So whichever one of these categories you fit in, it is important that you set yourself up accordingly. That way you can be taxed correctly, you will be held liable in the correct situations, and you are legally set up to do business the way you need to.
Many of the readers who come here are looking for wholesale items to resell on eBay. But, did you stop to think that maybe you can find wholesale merchandise right on eBay? No…. I am not crazy, you actually can purchase large quantities of merchandise through eBay and turn around and retail each item one by one. I know of several successful eBay powers sellers who know how to spot a great deal on eBay and then “flip it” one item at a time right back on eBay!
Some of the more popular items which can easily be flipped on eBay include:
Large lots of apparel – Look for gently used or shelf pull apparel. Shelf pull apparel is simply clothing that was unsold in the original department store for various reasons. Often, this shelf pull apparel will have the original retail tags attached…a real bonus for selling on ebay. You can find gently used clothing lots on ebay that will offer a great source for “single” sales. Look for wholesale lots containing high end name brands. There are a few categories of clothing that sell very well on eBay including maternity, children clothing and plus sizes.
Jewelry lots – You can find great deals on bulk jewelry lots on eBay. There several manufacturers who are selling rings, necklaces, bracelets and body jewelry which can be purchased and resold on eBay. They key to reselling jewelry on eBay is producing quality digital photos for your auctions.
There are hundreds of other bulk lots which can be purchased and resold, they trick is to spend enough time on eBay searching. In addition you want to make sure that when you bid on a lot of merchandise that you factor your shipping cost into you cost per piece. For example, if you buy a 100 pieces of used apparel for $49 and shipping to your doors costs $30, your landed cost per piece is .79 each!
We should take this time to also let you know that once you become an eBay Power Seller you will have access to the Resellers Marketplace – An exclusive “members only” marketplace for those who qualify as an eBay Power Seller. As a Power seller you will gain access to excess inventory directly from many manufacturers, liquidators, and wholesalers.
What exactly is a Seller’s Permit? Sometimes referred to as a Sales Tax License or Resale License this is simply a legal permit to sell taxable merchandise. As a seller’s permit holder, you agree to collect and remit sales tax to the Franchise Tax Board in your specific state. You will need to obtain a sellers permit if you plan on purchasing merchandise on a wholesale level, as most suppliers will require that your license be on file. The license tells the wholesale supplier that you are engaged in reselling merchandise and collecting the appropriate amount of sales tax as required by the Franchise Tax board for your state.
Anyone engaged in retailing merchandise must apply for a state resale license with the State board of Equalization. The process consist of filling out an application offering information about your business. The issuance of your license can take up to two weeks after you application has been submitted.
An application for a resale license will contain all the information you will need to comply with collecting and distributing sales tax for the items you retail in your state. You must collect sales tax for those items which are purchased in the same state your business resides in. For example, an apparel retailer who operates in California must charge sales tax for any purchases or shipment of merchandise (on a retail level) in the state of California. Please consult the Franchise Tax Board or your accountant for retail sales across state lines.
