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Wholesalers Expand Online Offerings

Jun 1, 2009

Internet wholesale suppliers large and small are enhancing their online marketing and sales strategies to help their retailer customers get more bang for the buck. Aware that everyone is looking for value, they are configuring packages that help retailers keep down their spending while still filling their shelves, or websites, with high demand products at prices that appeal to consumers.

In addition, these wholesalers have invested heavily in tweaking their websites to make it easier for retailers to find what they want quickly and efficiently. Many of them are also providing more detailed and accurate information about the content of closeout merchandise. Some are also giving retailers tips to improve their own merchandising.

Liquidity Services in Washington DC was founded in late 1999 to begin an eBay type model for the business community, according to Rob Caskey, VP of marketing. The site has 1.1 million registered users and it supplies new, used, refurbished, returns, closeouts and even salvage merchandise in virtually all product categories, overwhelmingly through online auctions. Retailers register for free on the website and include information about their business and the types of products they buy or are interested in. Once approved, they can access and browse the website and submit bids on lots of merchandise.

"Our site is designed to match the buyer with the right product," Caskey says. "We conduct regular surveys among our buyers to determine what they want and need in terms of information and site navigation. Through these surveys, we found that 'condition' and 'location' are important to buyers along with information about the content of lots.

"We provide full transparency into the purchase and give as much information as we can on the condition and contents, including whether items are new or not, boxed or not, shelf pulls, salvage and so on."

The location, he notes, is important, because Liquidity Services ships from its own network of six warehouses, and, in some cases, from third party sellers' warehouses. "Location impacts shipping costs," he notes, "and in some cases, if the buyer knows the location, he can opt to pick up the merchandise himself."

Most of the auctions have a starting bid of $100, "Which lets the marketplace set the final price," Caskey notes. The online auctions indicate an open time and close time. They typically last from three to seven days, according to Caskey, and bids are updated on the site in real time.

"Buyers can look at the bid history online," he says. "In addition, a bidder gets an email if he is outbid, and he can try again, if he acts fast."

Registered retailers also receive email alerts when shipments of merchandise they have indicated they are interested in arrive. "Many sign up to learn about a dozen different categories," Caskey says, "ranging from store fixtures, to large lots, to specific product categories and conditions and types of merchandise."

Although transactions take place online, Liquidity Services wants to keep in touch with its customers. In addition to emails and buyer surveys, the company has a buyer relations group, available to buyers at any time. "We try to be everywhere the customer is," Caskey says, adding that the company attends shows and other retailer events.

Unlike Liquidity Services, which covers all merchandise categories and focuses heavily on returns and closeouts, All Fun Gifts in Ashville, NC, wholesales new products, which fit a specialty niche. It wholesales vaporizers, hookahs, scales and grinders along with other smoking products and accessories. Although this is a niche category, the company inventories about 3,000 stock keeping units, according to Jayson Magura, owner.

"One product might have 20 different colors or flavors," he notes, "but it is still a lot of product to show on the web. We've put a lot of energy and effort into creating navigational tools that help a retailer zero on what he or she is looking for."

"We break down items by product type, by price, by material and by size," he says, "so a buyer can reach the exact product or products that fit a particular store or market area." In addition, there's a new product section. "At first, we put new products there and also in the appropriate breakdown area, and after awhile, we move it lower on the new product section and eventually, it drops off into its related categories to make way for newer items."

"We also put a lot of effort into updating the site every day. We have someone dedicated to keeping the website up to date." All Fun Gifts has been on wholesalecentral.com for about five years, allowing retailer customers to buy directly from the web, and Magura says, "It has worked really well for us." He says currently, "About 20 percent of all sales come over the web. We also have a lot of retailers that browse the web and then call in their order." Retailers register on the site to obtain a username and password to give them access to all products. "All the items in our catalog are on the website," says Magura. He adds, "Web sales have picked up dramatically in the past six months."

All Fun Gifts also emails its retailer customers every week. "We inform them of new products or of any special promotions. Every customer gets some email on a weekly basis."

Accessories Palace in Royal Palm Beach, FL, also occupies a niche, which is wider and deeper. The company covers a huge variety of fashion accessories, novelties, glow products, seasonal items and dollar store merchandise, which includes pet items, gifts, jewelry and more.

"We're geared specifically to items with high impulse appeal," says Craig Weil, president. "We add approximately 200 new items every week," he adds.

The company has been on the Internet for 10 years and conducts online shopping through wholesalecentral.com. "We don't require buyers to log in," says Weil, "and our website features an easy click and shop capability. There is a directory of all categories along the left side of the home page, and it is very explicit."

"That allows buyers to go immediately to items of interest, such as drug store items, 4th of July products, kids jewelry and so on. One of our hottest new categories is items carrying the peace sign. We have approximately 75 different items carrying the peace sign, and they are in very high demand," he reports.

According to Weil, "100 percent of our inventory is shown in photos on the site with descriptions and wholesale prices. We're zeroing in on items that retail at the $1 to $2 pricepoints," he says. "And all are carded, so retailers can put them on the selling floor immediately."

The company has just moved into a new 20,000 square foot showroom and warehouse. "Items are stacked by category and set up just like at a Costco," says Weil, adding, "we ship orders within 24 hours." Buyers are invited to visit the warehouse to select product and shop onsite.

While buyers can place orders directly online through wholesalecentral.com, they can order by email and fax. Weil notes, "We encourage buyers to order by phone, so we can have a dialog to help ensure they are getting product directly suited to their business." He also notes that inventory changes frequently and quickly.

Since stock at Discount Wholesalers in Chester Springs, PA changes so quickly, Saja Stark, sales manager, says, "Our retailers locate product on our website, but call us to complete the order." Discount Wholesalers specializes in a broad range of, "every day necessities," says Stark.

This includes food products, cosmetics, health and beauty aids, shampoos, household cleaning goods, paper products and other consumables, which are sold by the box, pallet and/or truckload.

Retailers have the option of registering for free on Discount Wholesalers' website where they enter their email address and what Stark calls, "a mini profile." They can tell us what types of products they are interested in hearing about, so we can tailor emails to their preferences. "They can pick their own interests, and they can also come back to the profile and change it if they want to receive emails about incoming products in additional categories."

"We've also added more pictures and more information on the website. We work all the time to streamline the buying process and make navigation easier for retailers," Stark adds.

The company supplies closeouts, liquidations and shelf pulls. "For most items, there are manifests that provide piece counts and a lot of information on content," says Stark. Pricing is also on the website.

The Bargain Warehouse in Myrtle Beach, SC, is taking to video presentations. It carries a wide range of product categories in closeouts, returns and overstocks, primarily from department stores.

"We've revamped our website, not only to make navigation easier for buyers, but also to attract new business people, including buyers and sellers," says Gerry Hunt, VP of marketing. Toward that end, the company has added instructional and educational videos. These are 30 to 60 second video presentations by hired talent that Hunt says, "Explain the wholesale salvage business and offer insights on how to succeed." There is text to accompany these dialogs. The subjects include an introduction "about us" component and others on business opportunities, product pitches, search engine options, and a wholesale website tutorial. "We're trying to get outside the box a bit and we think the dialogs will keep people checking the site."

The site also holds live auctions, which are streaming live video events. There is a pallet auction every third Thursday of the month, and every Friday and Saturday, there is a product auction where people can buy by the piece. Before taking it to the Internet, the auction option began in the company's 300,000 square foot warehouse, where retailer buyers may purchase pallets, which are all stacked by category. At these auctions, retailers can break down pallets, Hunt says.

The company's regular B2B wholesale business offers retailers an opportunity to buy pallets or truckloads at a fraction of the original wholesale cost, "So they can give their customers good value," Hunt says. The Bargain Warehouse also operates tent sales in sparse communities where they sell by the piece.

"We offer our retailer customers a distributorship option," Hunt says, "in which we bundle B2B, sales floor auctions, online auctions and tent sales and will teach them how to operate all four." The next step will be tutorials on the company's website, which retailers can access via a password. "These will be comprehensive educational sessions, in which we'll take them live, via video, to a tent sale, for example, and explain how it works and succeeds. If a retailer is just operating a store," he reasons, "he's missing a large component of business. We want to see our customers improve their business."

The Bargain Warehouse also offers its website as a turnkey online warehouse for its retailer customers. "A company can get into business for about $5,000, and we'll data feed our inventory into their website," Hunt explains. "Then we will also blind ship to their customers.

"We can also provide them with a monthly SEO (search engine optimization) package. Which helps them get a good selection of keywords to help drive business to their site. In short, we're developing what we think are the jazziest and sexiest marketing tools on our own site and sharing those tools with our retailer customers," Hunt says.

The Bargain Warehouse has been in business for 11 years, and Hunt reports that it did $10 million last year. "We expect to grow to $50 million in five years," he adds.

Like other wholesalers, Caskey of Liquidity Services acknowledges that at this time there is an ample supply of product. "This economy puts us in an interesting position," he points out. "We're able to help larger retailers dispose of merchandise." While he acknowledges that retail bankruptcies have added to the availability of merchandise for wholesale, he also says, "We focus primarily with ongoing entities and concentrate on working with the ongoing relationships we've established. We tend to work long term," he concludes. That applies to relationships with retailers as well as sellers.

The following people at these companies were interviewed for this article:

Craig Weil, president
Accessories Palace Inc.
585 105th Avenue North Unit 11
Royal Palm Beach, FL 33411
Toll Free: 866-725-2234
Tel.: 561-793-5565
Fax: 561-793-5562
Website: www.accessoriespalace.com

Jayson Magura, owner
All Fun Gifts
2000 Riverside Drive Ste. 11 D
Ashville, NC 28804
Tel.: 828-252-5228
Fax: 828-236-2658
Website: www.allfungifts.com

Saja Stark, sales manager
Discount Wholesalers Inc.
1985 Ticonderoga Boulevard #27
Chester Springs, PA 19425
Tel.: 610-458-1131
Fax: 610-458-1190
Website: www.discountwholesalersinc.com

Rob Caskey, VP of marketing
Liquidity Services Inc.
1920 L Street NW
Washington, DC 20036
Toll Free: 800-310-4604
Tel.: 202-467-6868
Fax: 202-467-5475
Website: www.liquidation.com

Gerry Hunt, VP of marketing
The Bargain Warehouse
10640 McDowell Shortcut
Myrtle Beach, SC 29576
Toll Free: 866-372-6950
Tel.: 843-294-2622
Fax: 843-294-1704
Website: www.thebargainwarehouse.com

Topic: Business Strategies

Related Articles: liquidations  auctions 

Article ID: 1087

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