Products can be purchased from auction houses through live and virtual bidding. Auctions may or may not allow potential buyers to preview the items ahead of time. Bidding occurs within a short window of time. Competition from other bidders may make it challenging to acquire items at a desirable sourcing cost.

Outlets

Auction Houses
Government Surplus
Close-outs
Storage Units
Liquidations

Advantages

  • Items may have already been identified by auctioneer
  • History of items may be available from the auctioneer
  • Valuable items can be sourced at low cost.
  • Some items can be sourced in single or small quantities.
  • Items sold as a lot may represent a better margin than individual items

Disadvantages

  • Stock cannot be replenished
  • Identification of items may be challenging
  • Item condition may vary from new to damaged goods with the same lot
  • Items may not be available to inspect before auction.
  • Items may require immediate payment after auction
  • Quality of opportunity varies by auction
  • Effective selection of products is dependent on clear understanding of resale value, online demand.
  • Competition from other bidders can drive up sourcing costs
  • Frequency of auctions may be low, inconsistent throughout the year
  • Challenging to scale upwards as business grows.
  • Pickup of items may be required within a short time frame
  • Auction winner may be responsible for disposal of unwanted items from a storage unit
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