Most people who lose money on liquidation did the maths on the wrong number. They divided the lot price by the unit count, compared it to a retail figure, and concluded the deal was excellent.
The number that decides whether a lot was a good buy is your cost per sellable unit, and it is always higher than your cost per unit.
Start with landed cost
Landed cost is everything it costs to get the lot into your hands and ready to sell:
- The lot price. On our listings this already includes delivery to the 50 states, which removes the most common hidden cost.
- Sales tax, where it applies to you.
- Getting it from the kerb into your space.
- Your labour, or someone else’s, to unwrap, test, sort, clean and repackage.
- Consumables — poly bags, boxes, labels, batteries for testing.
- Storage, if the lot will not clear quickly.
Labour is the line people leave out, and on Customer Returns it is rarely small. If sorting a pallet takes you a full day, that day has a cost whether or not you wrote yourself a cheque for it.
Then estimate your sellable share
Not every unit becomes revenue. Some arrive broken, some are missing parts or packaging, some are not worth the listing time. The share that becomes sellable depends heavily on grade: New / Overstock is high, Shelf Pulls slightly lower, Customer Returns substantially lower, Salvage lower again.
Do not guess this twice. Guess it once for your first pallet in a category, then measure it and use your own figure from then on. Your number for a category, in your channel, with your standards, is the only one that is worth anything.
Cost per sellable unit
Landed cost divided by the number of units you can actually sell. That is the figure to compare against your realistic average selling price — after fees, after shipping to your customer, after refunds.
A worked example with round numbers. Say a pallet lands at 1,200 dollars all-in with 400 units. Cost per unit is 3 dollars. If 60% are sellable, that is 240 units and your cost per sellable unit is 5 dollars. Now suppose your average net selling price is 12 dollars. Revenue is 2,880 dollars against 1,200 dollars landed, and the lot works.
Run the same pallet at 35% sellable and the picture changes: 140 units at a cost per sellable unit of about 8.57 dollars, revenue 1,680 dollars. Still positive, but thin once you count the time. That swing is why your own sell-through figure matters more than any other input.
Rules that keep the arithmetic honest
- Ignore manifest retail values when pricing. They are usually the last ticketed price and are not a resale forecast. Price on what you can sell for in your channel.
- Use net selling price, not list price. Platform fees, shipping and refunds come off first.
- Count your labour. If you would not do it for free for someone else, it is not free here.
- Measure sell-through per category. One blended number across different categories hides the loss-makers.
- Price in your slow tail. The last 20% of a pallet often takes as long to clear as the first 80%.
Why buying one pallet first is the cheap answer
Every input above is a real measurement you can only get by doing it. There is no membership and no minimum order here, so a single pallet in a category is an inexpensive way to replace three estimates with three facts before you scale.
And if the category turns out to be wrong for you, any lot can be returned within 30 calendar days of delivery for a refund of the lot price, with no restocking fee. Details in the Returns & Refund Policy.
