24 Mar

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The Difference Between Wholesale Suppliers and Liquidators

Wholesale supplier vs liquidation

Upon first glance, most people will not be able to tell the difference between wholesale suppliers and liquidators. This is because both types will supply companies with wholesale merchandise that tends to be lower than what consumers will pay at retail.

However, upon closer inspection, you will notice that there are quite a few key differences between wholesale suppliers and liquidators, with the differences likely to have a massive impact on the profit margins of retailers. Here, we will discuss retail liquidation in Toronto and why it may be the preferred route over wholesale suppliers for most businesses.

What is a wholesaler?

Most wholesalers will buy a large liquidation lot from a top-level liquidation company and then dichotomize the large lot into many smaller ones or parcels so that they can sell them at a fixed wholesale price to multiple organizations.

In fact, many of the aforementioned smaller lots are bought by other smaller wholesalers, who will then add their own markup to the smaller parcels, further augmenting the price that businesses will need to pay to obtain them.

Unfortunately, due to the amount of selling and reselling that goes on between larger and smaller wholesalers, the retailers that end up buying these items will pay close to the retail price, which will make it hard for these retailers to make a profit (if any) when they sell their items to the general public.

What is a liquidator?

The best liquidators will work directly with the most reputable names and brands in the country. This provides them with an online realm or hub through which those reputable retailers can dispose of their closeouts, overstocks, and unwanted client returns in a very quick and easy manner, with most items being disposed of via a live liquidation auction.

In sum, liquidators run online liquidation sites that retailers like Walmart, Amazon, and Target can use to directly sell their unwanted customer returns, closeouts, and overstocks to resale establishments via a (usually) live auction, either for a negotiated or fixed price.

Reputable Liquidators are Not Middlemen

Most liquidators are not middlemen, unlike many typical wholesalers. Instead, most are essentially facilitators that retailers can directly sell their unwanted wholesale items to companies through.

Moreover, unlike wholesale suppliers, liquidators do not buy wholesale items that have already been bought and then add their own premiums to said merchandise. They also do not break up lots of merchandise. Instead, the goal of a liquidator is to provide the ideal mechanism through which a retailer can directly sell their unwanted client returns, closeouts, and overstocks to other companies.

Liquidators Don’t Cherry-Pick Items

Unfortunately, many wholesale suppliers will cherry-pick the pallets of liquidated goods wholesale, and the same goes for the boxloads and truckloads of items that they sell at the behest of their retail partners.

In fact, it is very common for wholesale suppliers to purchase liquidation lots in bulk and then hand-select the top merchandise so that it can be sold separately at a higher markup. Then, they will often market mediocre or shoddy merchandise as premium items in order to dupe businesses to buy them.

Fortunately, reputable liquidators do not operate in such a fashion. Instead, liquidators do not cherry-pick items, and they also do not alter or modify manifests to make truckloads, pallets, and boxloads appear more appealing than they truly are. Hence, if you are worried about questionable actions taking place, then working with a retail liquidation company in Toronto might be your best option.

The Cost Difference Between Wholesale Suppliers and Liquidators

Arguably, the biggest difference between liquidators and wholesale suppliers is the cost difference. That is, if you partner with a wholesale supplier, then you will need to pay more for their products, as the suppliers will hike up their prices before they sell you their merchandise.

However, with a liquidator, you will not have to deal with a mediator. Instead, you will be going straight to the source, which will allow you to pay the same amount that wholesalers would pay to buy the same items. Hence, if saving money is a top priority for your business, then we would suggest that you partner with a reputable liquidator instead of partnering with a wholesale supplier.

What’s more, most profitable retailers have no qualms with taking a substantial hit on the prices that they can expect to obtain for the wholesale items that they don’t want. This is why purchasing their unwanted merchandise directly from an online liquidation marketplace that is partnered with them makes the most economic sense.

That is to say, why would you want to pay more than you need to when you can cut out the middleman and pay significantly less for doing so? Moreover, dealing with a liquidator will mean that you won’t have to worry about manifest tampering, cherry-picking, or other such scheming business practices either.

In sum, by eliminating the wholesaler from the equation, you will be able to enjoy the same prices that they would pay to buy the same items. If you want to maximize your return on investment, then it makes the most business sense to pay less and sell for more by working directly with an online liquidation marketplace.

The Michaels Global Trading Difference

If you would like to learn more about the benefits of retail liquidation or would like to avail yourself of the services of a retail liquidator in Toronto, then please visit our website, or give us a call at 888-471-5066 to book a free, no-obligation consultation in order to discuss your business needs in confidence.

Michaels Global Trading (MGT) is an established retail merchandise liquidator that is fully insured and bonded and assures timely, concise, and clear communication, and an unrivalled level of transparency through every stage of the liquidation process.

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Marlon McPherson is the CEO of Michaels Global Trading, certified appraiser and liquidator in Toronto, Ontario. With over 7 years of experience in the industry, he has worked with companies such as Druxy’s Deli, Blackberry and Thomson Reuters. Marlon is very involved in the day to day operations of MGT from marketing messages to sales meetings. When not working Marlon enjoys spending his time wine tasting, travelling and cooking at home with his family.

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