Posted by Alex Jackson on July 08, 2016
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.
Ultimately 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.