Understanding the Importance of Consistent vs. Inconsistent Supply of Goods
When purchasing salvage goods and depending on your business needs, it is important to take into account the consistency or regularity of the goods you are purchasing.
The information below is general and may or may not apply to you specifically. Each customer is unique and may have his own specific needs, pricing policies, etc.
The availability of particular types of merchandise should affect the types of goods you purchase and the way you choose to process, sell and price the goods.
Goods available in the salvage industry can typically be broken down into 3 categories:
- Consistent Regular Goods (available on a regular basis either immediately or within a few days).
- Non-Consistent Goods (available periodically, significant waiting times between availability)
- One-off, Opportunistic Purchases (typically one-time offers on goods which once sold, will not be back in stock or will only be back in stock after a very extended period of time).
Ongoing Consistent Goods
Many of our pallets, loads and truckloads are items that we sell on an ongoing basis- meaning we either have them in stock all the time, or we receive new stock very shortly after we sell out.
We have over a dozen listings like these that we have been offering for years and will continue to offer for as long as they are available.
Consistent ongoing goods are important to note because:
- Consistent supply of similar goods can help build and grow a business
- Knowing you can get more of the same type of merchandise as soon as (or before) you run out allows you to have a consistent flow of product for your customers, and increases your customers’ loyalty.
- Dealing with consistent types of goods that you can purchase again and again allows you to be more flexible and competitive with pricing since you can easily re-purchase such goods.
EXAMPLE: say you purchase “X” product for $10. Better buy and sell 100 units for $20 (and make $1,000 gross profit), than to hold out for $25 and only buy and sell 50 units (and make a gross profit of $750).
If items can be easily re-purchased, your aim would be to price the items in order to maximize your gross profit.
NOTE: It is important to note that while certain loads can be available very regularly, there may also be inconsistencies in actual products and conditions of products received in each load.
Several loads and truckloads available in the industry are only available on an inconsistent basis and have relatively low and sporadic supply (ex: designer handbags).
Non-Consistent ongoing goods are important to note because:
- They are unlikely to be readily available for re-purchase and may have significant waiting times between avaiabilities.
- It is difficult to keep a regular supply of such goods for your customers
- Buildling customer loyalty and growing your business is more difficult when dealing with merchandise that has an inconsistent supply
- You should maximize potential profit from goods which are not available on a regular basis. Once they are sold you won’t be able to purchase them again anytime soon and you should therefore price them accordingly. For example, for items that are not easily/readily available to purchase again, it is better to take 2 weeks to sell them for $40/unit than selling them in one week for $30/unit.
One-Off, Opportunistic Deals
Occasionally, there will be one-off deals which, once sold, will no longer be available again (such as discontinued models, goods from insurance companies, store/warehouse closures etc).
Typically, once these goods are sold, similar deals will most likely not be available again.
Such deals can be very profitable and are considered to be opportunistic. Buyers should always aim to maximize their selling price and profit on such purchases as stock is limited and typically there will be little competition and supply of similar items.
Furthermore, similar goods cannot be re-purchased so as long as your price is competitive and you can sell the items in due time, there is no need to price them too cheaply.
When purchasing a lot from us, make sure to find out the consistency of the goods so that you can have a plan in place for the merchandise.
If it is consistent, regular merchandise that you can order every week, you can make it your bread-and-butter and sell it for cheap and quickly.
If the merchandise is more elusive or will not be in stock again after we sell out, you can purchase a larger quantity in one go, or sell it at a higher profit margin to maximize your returns. You can also let your customers know that it is a limited-time-offer product, raising its value and appeal.
When speaking with a Via Trading Account Manager, please be sure to ask about the consistency of merchandise to make sure you are basing your purchases on something we can keep providing you with consistently.