About Close Out Lots

Closeout stores are retailers that specialize in buying closeout items at a reduced cost from other retailers. They then sell those items at a discount, and usually in bulk, to the public. Most of the products offered in closeout lots are available at a cheaper price because the original retailer went out of business, relocated, or filed for bankruptcy. Some closeout lots may be available due to overstock, salvage, or customer returns from other stores. There are a number of closeout retailers in the United States, such as Big Lots, TJ Maxx, Marshall's, Ross, and Value City.

Significance

Closeout lots can save consumers and business owners a significant amount of money, both in the short term and in the long-term. Some new or expanding businesses rely on closeout lots to acquire the merchandise needed to open their doors or expand their current stock. Private consumers are increasingly turning to discount stores to purchase closeout lots in an attempt to avoid high prices in the general marketplace. In times of an uncertain economy and job market, some consumers would be forced to drastically reduce the amount of food, household goods, and clothing purchased if not for the savings offered by closeout lots.

Features

Closeout lots are generally sold in large warehouses, although a number of smaller chain stores now specialize in this type of merchandise. Closeout lots are typically arranged in bundles that are packed on pallets. A pallet is a wooden base where items or boxes are stacked for transport or storage. Some pallets can be as high as 8 feet tall, while others may be significantly smaller. Closeout lots can also be sold open-box, which means customers can pick and choose which items to purchase. Often, this type of closeout sale limits the number of each type of item allowed or charges based on weight. Some closeout warehouses require customers to bring their own boxes to fill, and the dollar amount charged is per box. Most items sold on pallets or inside boxes as part of a closeout lot is sold as-is. This means that the store makes no claim as to the condition of the items included in the lot, and all of the items must be accepted as part of the purchase agreement.

Benefits

Closeouts are one of the easiest and cheapest ways to purchase stock for a new or expanding store, as the items can be purchased at a low price and then resold for 2 to 3 times as much to customers. Most larger wholesalers offer closeout lots for a variety of items, including household goods, clothing, food, cleaning products, toys, and other merchandise. Some closeout lots must be purchased in large bundles of similar items, while others allow customers to pick and choose. This last option is especially useful for individual customers who can potentially save hundreds of dollars each month by purchasing commonly used food and household items in bulk or at reduced prices.

Warning

When purchasing food products, cleaning products, or toiletries, it is essential to look at the expiration date on the product. Some retailers sell nearly out-of-date items to closeout resellers due to their own policies regarding how long items can be kept on store shelves. Some items included in closeout lots may be at or near the expiration date, which can, in some cases, be dangerous. Rarely, recalled products may end up in closeout lots, too. Therefore, it is essential to research any items before purchasing them. This is especially true for baby toys and children's products. If you purchase the lot and later learn that the product has been recalled, you may be unable to return it, sell it, or use it.

Considerations

Many items sold as part of closeout lots are sold as-is and cannot be returned later. Some items sold in closeout lots are returns or overruns from retailers, which means you might encounter some products with minor defects or misprints. Generally, this is acceptable as the price of closeout lots it very reasonable. It is wise to look through closeout items before purchasing them, when allowed, and to set aside any items that are of poor quality or defective. Often, larger bundles offered at closeout wholesalers are a result of store closings or liquidations. These items are typically in good shape, but may be higher priced.