I know you
are probably enjoying another beautiful summer day but today we want to talk
about winter, sorry you know it’s coming. More specifically buying winter in
summer and summer in winter confused yet? No problem we will explain it.
Liquidation merchandise is very dependent on the season and of course on the
retailers providing it. Retail is as as everyone knows always well ahead of the
current season remember the first holiday display you saw last year? Nearly
half of all traditional brick and mortar retailers start the holiday hype now
before Halloween, that’s between 2 to 3 months in advance! What this means for
the liquidation universe is that the inventory we receive Is usually 2 to 3 months
or more behind what’s on the shelves now at the retailers. It’s currently July
2016 and the bulk of the merchandise coming in now is late winter 2015-16.
Let’s illustrate this point briefly, last winter was a particularly mild winter
in the United States so sales for winter coats were very poor. This means a lot
of retailers got stuck with a ton coats they could not sell because of the weak
demand. What this means to you is a wide array of winter coats dramatically
under normal liquidation price levels and just a few more weeks before demand for
these items start their normal seasonal spike. Not only are you getting great
pricing but you are also getting first dibs on the winter lots from the
previous season, meaning the best mix of brands and styles that are in demand.
This seasonal effect also works in the reverse but you have to be careful in
lot selection. Spring/Summer merchandise available at present for the most part
will be from early 2015 meaning these lots can be anywhere from 8 to 12 months old.
Because these lots are not getting any younger like all of us, we are
discounting heavily because the season is ending soon. This also means the lots
have been kicking around for a while and there may be a reason for it maybe a
poor mix of brands or styles. Now there are still gems to be found but be
cautious and review the lots carefully make sure you’re not buying an entire
lot of shorts right before a potentially chilly fall winter season.
your goal is maximizing your profits and to do this effectively you need to
know not only what to buy for your business but also when you need to buy to
maximize your investments return.