What are your payment options when purchasing wholesale and wholesale liquidation merchandise from a supplier, or should I say what are the payment requirements? Many on line vendors who distribute wholesale merchandise accept the traditional forms of payment including Visa, Mastercard, Discover and American Express. There are many companies that will also accept payment via Paypal, which is a way to electronically send money to an individual or company by way of an email address.

You may have run across some companies who list, “wire Transfer” as a payment method. In fact most companies who distribute wholesale liquidation pallet and truckloads require that your purchase be paid for with a bank initiated wire. A wire transfer is an almost instantaneous electronic transfer of funds from your bank account to the receivers bank account. You must have the payee’s full business name, bank name, routing and account number to send a wire. A wire transfer is issued from just about any bank and takes a few minutes to complete while in the teller line. Your bank will charge a fee to process a wire transfer. Fees will vary, but average around $15-$30 for an outgoing transfer.

Although wires are immediate, it can take 12 to 24 hours for payment to arrive in the payee’s account.

In my experience it is an industry standard when purchasing large quantities of liquidated merchandise to use a wire transfer. When you are buying liquidated inventory direct from “Big Box” retailers..this is your only option for payment.

Wire Transfers are final, there is no recourse. You can charge back a credit card purchase, but a wire is unstoppable. Once funds hit your payee’s account…it is a done deal. Make sure you fully understand what you are buying and who you are buying merchandise from before you initiate a wire transfer.

Before you make any large purchases using a wire transfer make sure you have investigated the company you are about to buy from. Check references and ask as many questions as you can before making an investment.

Are you Investing in the stock market or buying a new home? Chances are you will use a Broker to complete either one of the transactions. Maybe your scheduling a much needed vacation or getting a new auto insurance policy…you might use the services of a Broker here as well.

Being a professional Broker is a well-respected career unless, of course, your talking about liquidation Brokers. Why does the term, “Liquidation Broker” leave such a sour taste in the mouths of so many? I have been on both sides of the transaction when it comes to brokering liquidation merchandise. I have acted as and facilitated hundreds of brokered wholesale purchases and prior to becoming a Broker myself; I purchased pallets and truckloads from Brokers.

A wholesale liquidation Broker locates merchandise for sale and then actively looks for a buyer.

A broker makes a profit in one of two ways:

• Broker finds 100 Cell Phones for $10 each and agrees with seller to a 5% selling commission. The Broker then advertises the cell phones, completes the sale and the seller receives proceeds. The seller then would issue a check to the Broker for 100 x $10 = $1,000 x 5% = $50
• The Broker finds another 100 Cell Phones for $10 each, but this time the seller will not offer a commission. The Broker will then advertise the cell phones at $13 each, adding his markup/commission of the “front end” of the transaction. Assuming in this scenario the phones sell for $1,300 the Broker would then pay the seller $1,000 and arrange delivery of the phones. Here the Broker has made $300

The second example represents how most brokered transactions are set up. Be cautious when purchasing from a Liquidation Broker:

• Brokers cannot accurately describe the merchandise they are selling because it is not in their possession
• Brokers tend to offer “Inflated” claims about the quality/condition of pallets and truckloads of liquidation merchandise they are representing
• Brokers typically set their own merchandise “markup” and if too high this will decrease your ability to profit from your wholesale purchase. In each transaction you really do not know how much markup or commission you are paying to the broker
• Brokers tend to be very responsive with purchase inquiries, however once a purchase is made customer service usually becomes non-existent
• Very few Brokers work for repeat business

The above points represent my personal opinion based upon years of experience in the liquidation industry. As earlier stated, I have purchased pallets and truckloads of wholesale closeout merchandise and have witnessed first hand how a purchase can be grossly misrepresented through a brokered transaction.

If you are new to purchasing liquidation merchandise it is best to inspect the actual merchandise before you make an investment. There are plenty of Liquidators who maintain actual warehouses full of merchandise. You might have to research your particular State and plan a road trip visiting a few companies, but in the end the effort and time invested could save your pocket book tremendously.

What is your experience working with Liquidation Brokers? Share with our community your story…