Tips for Shopping Retail Store Liquidation Sales
Bankruptcy & Going out of Business Sales Can Mean Bargains
Liquidation Sales, Bankruptcy Sales, Going out of Business Sales, Store Closure Sales. Call them what you will, as retail stores continue to struggle for business, this type of sale is becoming common. Within the last few months of 2008 and early 2009, the list is growing:
- Linens 'n' Things
- Pier 1 Imports
- KB Toys
- Expo Design Centers
- Circuit City
- And more...
With an unprecedented number of retail stores going bankrupt, liquidators are stepping in to move their inventory. And closeout sales should mean bargains for shoppers, right?
Think again. It doesn't necessarily work that way.
Most retail stores won't clear their own stock, but will outsource to a liquidator, a liquidation specialist. In the meantime, they still need to pay the last month's rent and pay their employees according to union agreement or labor law. They want to get the process over and done with. This means that the liquidator needs the prices to be as high as possible while moving the goods as quickly as possible. "Acting in our capacity as liquidators" notes the web site of Grant Thornton, a large international liquidator, "we sell off assets, settle claims by or against these [insolvent] companies and distribute whatever additional property remains."
This means that the liquidator's job is threefold.
- to make as much money as possible for the defunct business's creditors
- to make a profit for themselves
- to meet a deadline that may be required by law
Liquidation Sales from High to Low
Many liquidation sales work like a "dutch auction." Prices start high, and get lower as the deadline approaches. Consumers who are first at a liquidation sale have their pick of inventory, but at near-retail prices. The longer you wait, the lower the prices, but the more likely it is that the good stuff will be gone. Often what is left after the liquidation sale is over is wholesaled to purchasers for dollar stores and other deep discounters.
Tips for Shopping at Liquidation Sales
Here are some things to check before you buy at a liquidation sale
- Check the price - don't automatically assume that a liquidation sale is going to be the best price, especially at the beginning of the sale. Existing retailers want your business badly and are discounting their current stock too. You may get a better deal at a local retailer who's still open, and might possibly still be around next year if you need service.
- Check the warranty – if it's a manufacturer's warranty, you should be okay. If it's a dealer warranty, or if the item relied on the dealer to service the warranty, you may be on your own.
- Check the product – liquidation sales are usually final. Open the box and check for damage. Make sure all the parts, accessories, instructions, warranty card and everything else is there.
- Check the payment method – A credit card payment may give you a chance to contest the charge if it turns out that something is broken or missing after all.
The cloudy economic climate may bring a silver lining for consumers. Shopping at liquidation sales is a source of bargains, if the circumstances are right.
Lineup at Liquidation Sale in Daly City, CA
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Tower Records Out of Business Sale, 2006
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