How to Buy Surplus Industrial Electrical Parts

Many companies sell surplus parts to clear out their warehouses.

Many industrial companies face a high cost of capital investment in their factories. Building a new factory, or retooling an old factory, can eat into the entrepreneur's cash or credit lines. Buying surplus industrial electrical parts is a great way to reduce the capital investment while getting unused or lightly used machines that run efficiently. Many sources of parts exist, from the manufacturer's own overstock, surplus from other manufacturers that use the electronic parts and third party surplus dealers.

Instructions

Buy From the Manufacturer

1. Make a list of the parts needed. Keeping a list of the parts and manufacturers helps organize the search for parts and lets you compare prices from several suppliers.

2. Contact manufacturers and inquire about any surplus stock they have for sale. Manufacturers with overstock may be willing to lower the price in order to move their product or offer lower prices on surplus as part of a larger order.

3. Arrange to buy the surplus electronics and to have them shipped. Make sure shipping prices have been determined in price negotiations.

4. Maintain good business relationships with manufacturing contacts. Regular contact with salespersons opens up opportunities to learn about special deals the company offers when they find themselves with more surplus goods.

5. Keep track of the product developments of the manufacturer. Companies routinely upgrade products or discontinue product lines. During product transitions, manufacturers try to unload old stock to make room for new products. Contact companies undergoing transitions and offer to buy up left-over surplus.

Buy From Other Customers

1. Find other companies that use the same electrical parts as you do. Many manufacturers end up with extra parts due to changes in the market and shifts in internal business strategies.

2. Check if the company has a surplus page on their website. Many larger companies acquire surplus and have existing procedures to sell it to other customers. There may be buying restrictions for direct competitors. Check the company sales policy to be sure.

3. Contact the person in charge of handling surplus. Many smaller companies won't have an online sales of surplus goods and will have a manager who handles stock.

4. Negotiate the purchase of surplus stock with the manager. The process can take time if the company doesn't do many surplus sales and doesn't have a regular procedure in place.

5. Arrange to have the surplus goods shipped or picked up from the company.

Buying From Surplus Companies

1. Search for surplus and salvage companies. These are third party dealers that buy surplus in bulk and resell it. Check the surplus seller's business rating with watch-dog organizations found online.

2. Contact a reputable supplier and inquire about the stock. Ask about the quality of the goods they are selling. Salvage goods mean used goods that may be of lowered quality than overstock and liquidation. Customer returns are goods returned by the customer and may be defective.

3. Order a small amount from the surplus dealer first. A case or a pallet should be the most. That amount will give you an idea of the quality of the goods sold by the company.

4. Inspect the company's facilities before making a bulk purchase. A few hundred dollars spent on airfare will be worth it before spending thousands of dollars on bad goods. Check the quality of the facility and goods present.

5. Buy more electronic surplus once you have established a good relationship with a surplus dealer.

Tips & Warnings

• Never send money over wire transfers to companies you don't trust or ones with which you don't already have a relationship.

References

• FrugalMarketing: The Ten Tenets Of The Surplus & Salvage Industry!
• Bnet: One Man's Treasure - Industrial Surplus Programs Allow Businesses to Donate Excess Inventory to Help Worthy Causes