Liquidation Arbitrage Strategy 💰
Created: 2026-01-25
Updated: 2026-01-26 - Online-only constraint added
⚠️ ONLINE-ONLY CONSTRAINT: All liquidation must ship to Jeff. No local pickup, no warehouse visits.
✅ Recommended: B-Stock, Amazon Bulk Liquidations (ship to address)
❌ Excluded: Local pickup warehouses, in-person auctions
The Opportunity
Liquidation = buying returned/overstock merchandise at 10-30% of retail, reselling at 50-80% of retail.
Why it works:
- Big retailers (Amazon, Walmart, Target) can't efficiently process returns
- They sell pallets/truckloads to liquidators at pennies on the dollar
- Resellers cherry-pick the best items and flip on eBay/Amazon/local
Typical margins:
- Buy pallet for $300-500 (electronics) or $100-300 (general)
- Contains $1,500-5,000+ retail value
- After sorting/testing: expect 2-4x ROI on good pallets
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Tier 1: Liquidation Marketplaces (Auction-Based)
🥇 B-Stock (bstock.com)
- What: Direct from Amazon, Walmart, Target, Home Depot, Best Buy
- Format: Auction (competitive bidding)
- Best for: Electronics, appliances, tools
- Minimum: Usually $500-2,000 per lot
- Pro tip: Create accounts on multiple B-Stock storefronts (each retailer has their own)
- Links:
- Amazon: liquidations.amazon.com → redirects to B-Stock
- Walmart: bstock.com/walmart
- Target: bstock.com/target
- Best Buy: bstock.com/bestbuy
🥈 Liquidation.com
- What: Massive marketplace, many sources
- Format: Auction
- Best for: Variety, mystery lots, overstock
- Minimum: Lots start at $100
- Warning: More hit-or-miss quality than B-Stock
🥉 Direct Liquidation (directliquidation.com)
- What: Amazon, Walmart returns
- Format: Fixed price + auction
- Best for: Beginners (more transparent manifests)
- Minimum: ~$200
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Tier 2: Direct Retailer Programs
Amazon Bulk Liquidation Store
- URL: amazon.com/Amazon-Bulk-Liquidations/b?node=23511005011
- What: Buy direct from Amazon (no middleman)
- Format: Fixed price pallets
- Best for: Verified Amazon inventory
Amazon Warehouse Deals (Personal Use)
- Individual items at 20-40% off
- Good for testing categories before buying pallets
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Tier 3: Local/Regional Sources
📦 Store Closing Sales
- Track via: storeclosingsblog.com, retail-insider.com
- Why: 50-90% off when stores liquidate
- Strategy: Hit early for electronics, late for fixtures/displays
🏪 Bin Stores / Amazon Return Stores
- Local stores that sell returns by the bin
- Prices often decline daily ($7 Mon → $1 Fri)
- Search: "[your city] amazon return store" or "bin store"
🚛 Local Liquidators
- Smaller operators who buy from big auctions
- Less competition, often cash deals
- Find via Craigslist, Facebook Marketplace, wholesale groups
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Tier 4: Creative Sources
🔥 Pricing Errors
- r/buildapcsales, r/Flipping, Slickdeals "hot deals"
- Target/Walmart clearance stackable with coupons
- Speed matters: Deals die in hours
📱 Facebook Marketplace Arbitrage
- Buy underpriced items locally → flip on eBay
- Look for: estate sales, moving sales, "need gone today"
- Power move: Set up alerts for specific SKUs
🏭 Wholesale Overstock
- Alibaba/1688 for direct factory overruns
- Closeout News (closeoutnews.com) for brand overstock
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What Categories to Target
✅ HIGH MARGIN (Focus Here)
| Category | Why | Risk |
|----------|-----|------|
| LEGO | Holds value, easy condition check | Low |
| Small Appliances | High retail, easy to test | Medium |
| Name-brand Tools | DeWalt, Milwaukee hold value | Low |
| Premium Headphones | High margin, compact | Medium |
| Video Game Consoles | Demand stable, easy flip | Medium |
⚠️ MODERATE (With Experience)
| Category | Why | Risk |
|----------|-----|------|
| Electronics (phones, laptops) | High value but needs testing | High |
| Clothing (name brands only) | Low cost, slow sell | Medium |
| Home goods | Low margin, bulky | Medium |
❌ AVOID
- Furniture — Shipping kills margin
- Cheap electronics — Not worth testing time
- No-name brands — No resale demand
- Mystery pallets without manifest — Gambling
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Execution Playbook
Phase 1: Research (Week 1)
1. Create accounts on B-Stock, Liquidation.com, Direct Liquidation
2. Watch 10-20 auctions without bidding (learn pricing)
3. Join r/Flipping, Facebook liquidation groups
4. Find 2-3 local bin stores, visit each
Phase 2: First Buy (Week 2-3)
1. Start small: $200-500 max first purchase
2. Pick a manifested pallet (know what's inside)
3. Category: LEGO, tools, or small appliances
4. Have eBay/Amazon seller account ready
Phase 3: Process & Learn (Week 3-4)
1. Unbox, test, photograph everything
2. Track: Item | Condition | Est. Value | Actual Sale
3. Calculate true ROI after fees/shipping
4. Identify what sold fast vs. what sat
Phase 4: Scale (Month 2+)
1. Increase buy size based on learnings
2. Develop category expertise
3. Build buyer relationships (bulk buyers for damaged goods)
4. Consider storage/processing space
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Tools We're Building
✅ Built
-
ebay-scanner.sh — Check eBay market prices for any item🔨 To Build
- [ ] Pallet ROI Calculator — Estimate profit from manifest
- [ ] B-Stock Auction Monitor — Alert on underpriced lots
- [ ] eBay Sold Price Checker — What items ACTUALLY sold for
- [ ] Clearance Scanner — Monitor Target/Walmart markdowns
- [ ] Store Closing Tracker — Alert on liquidation sales near Denver
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Key Metrics to Track
Monthly:
- Total invested: $____
- Total sold: $____
- Net profit: $____
- ROI: ____%
- Hours spent: ____
- $/hour: $____
Per Pallet:
- Purchase price: $____
- Retail value (manifest): $____
- Sellable value (after testing): $____
- Actual revenue: $____
- Net after fees: $____
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Denver-Specific Resources
Bin Stores to Scout
- Search: "Denver amazon return store"
- Check: Aurora, Lakewood, Westminster for warehouse stores
Local Liquidators
- Colorado Liquidators (if exists)
- Estate sale companies: estatesales.net/CO/Denver
Thrift Gold Mines
- Arc Thrift Stores (check for mispriced items)
- Goodwill Outlet (pay by pound)
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Next Steps
1. Whiz: Build B-Stock auction monitor
2. Whiz: Build eBay sold price checker (completed sales)
3. Whiz: Set up clearance price alerts
4. Jeff: Create accounts on B-Stock, Liquidation.com
5. Jeff: Scout local bin stores this week
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This is a living document. Update as we learn.