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Writer's pictureRameez Bardai

Understanding Liquidation Sale: Your guide to save money

A liquidation sale is when a company sells its product at a discounted price. Now that you've heard about liquidation, you might have searched for it online and learned products with discounts. If you are on a mission to save money, this catches your attention, and you want to know more about these sales and liquidation stores. We got you. In this blog, we have discussed liquidation sales in detail, their types, why retailers hold these sales, and how you can save money in these sales.


What is a Liquidation Sale?

A liquidation sale is a type of sale in which a company sells its products in bulk at a very reasonable price. A company sells its product in the sales in massive amounts for a reason: apparently, it's a company loss. But deep down, many factors are involved in these overstock and huge sales. We will uncover this mystery of huge overstock and huge sales in liquidation stores.





Examples


1. Bed Bath & Beyond

Bed Bath & Beyond declared company closure in 2023. The company was struggling financially and decided to sell its parts. Because of its enormous debt, the company needed help competing with competitors.


2. Zelles

Zellers was a Canadian store with 350 locations in 1999, but it struggled financially in 2013 and declared a liquidation center.


Types of Liquidation Sales


Bankruptcy Liquidation Sale:

A bankruptcy sale is a liquidation sale in which a company sells its products in bulk at a discount to pay its debt. It is a legal process companies and individuals use to pay their debts. Canada has two legal frameworks: the Bankruptcy and Insolvency Act and the Company Creditors Agreement Act. The BIA provides a framework for bankruptcy in Canada for liquidating companies. Large companies use the CCAA to aid in their sales.


Store Closure Liquidation Sale:

A store closure sale is when a company sells its products when planning to close its store. These sales can also be called store-closing sales or close-out sales.


Overstock Liquidation Sale:

An overstock sale is when a company overstocks its product and cannot sell it on time, so it holds a liquidation sale to clear that stock. Another reason companies overstock these sales might be to eliminate their old products and make room for new ones.


Online Liquidation Auctions:

In this type of liquidation sale, the company sells its products online. Online liquidation auctions can be described as online marketplaces where buyers can convince sellers of the prices they demand.


Why Retailers Hold Liquidation Sale:

It's time to reveal why liquidation companies and stores hold these sales at discounted prices and their reasons and benefits.


Financial Struggles of Bussiness:

When a company cannot pay its debt, it uses liquidation sales to stabilize its financial condition. This is one prevalent reason that companies hold these sales.


Inventory Management Overstock:

Overstock is another reason companies hold these sales. As discussed above, the company holds these sales when it cannot sell a product on time and wants to eliminate it and make room for a new one. Sometimes, companies sell products in sale because of changes in consumer demand. It is also called an overstock liquidation sale.


Market Exit Strategies

Often, this sale is used as a strategy to exit the market. It happens when the company decides to close their business. Businesses can shut down for several reasons. They might be shifting to a different market or struggling financially, so they decide to shut down their business.


How to Maximize Savings at Liquidation Sales

Now that you have understood this sale, its type, and its reason, it's time to learn how to save money at these sales. This section will educate you about some essential things to help you save money at these sales.


Understanding these Discount Structures


In liquidation sales, different prices are available at various times. At the start of the sale, they may be high, but at the end, they are very low. For example, in the beginning, they give a 20—to 30-percent discount; later, they may offer a 70—to 80-percent discount.


Timing Your Purchases for Maximum Savings

Timing is important in these sales to maximize the benefits. Liquidation companies and stores offer these sales at specific times of the year, such as New Year's, Boxing Day Deal, end-of-year, and season sales, so it's crucial to be aware of the exact times of these sales offered by the company and store.


Prioritizing Big-Ticket Items

A liquidation company and a liquidation store usually offer hefty discounts on oversized items like furniture, electronics, appliances and gadgets. These items on this sale can help you save money.


Costco liquidation:

In Canada, a platform called Costco Liquidation Auctions Canada makes the bidding process easy for buyers.

Except for Quebec, all Canadian buyers can participate in this process. The first step is to fill out the application form. Once it's approved, you can bid on items. A purchase is not allowed without bidding.

It is an excellent option for saving money on many items. It offers discounts on different products and authentic, quality products. Costco Wholesale Liquidation has everything you need if you are looking for gadgets, electrical appliances, home improvement items, daily life items, kitchen items, and more.

The buyer must provide a resale certificate or business proof to complete the registration process at Costco liquidation. To get the maximum discount, you must research the product first, set the budget, analyze the quality and market, and then buy. This will save you more money. Understanding discount structures, sales timing and grabbing oversized items will help you save money.


Products Commonly Available at Liquidation Sales

Several different products are available for sale in these online marketplaces.

  • Office equipment

  • Electrical appliances

  • Home appliances

  • Home decoration

  • Bathroom items

  • Sports items

  • Kids toys

  • Furniture

  • Grocery

  • Health item

There are so many other items available in these sales.


Online vs. In-Person Liquidation Sales:

This section will discuss the difference between online vs. in-person liquidation sales.


Element

Online liquidation sales

In-person liquidation sales

Convenience

More convenient 

Less convenient

Accessibility

You can purchase products in the comfort of your home

You need to travel physically to buy the product

Product inspection

You cannot thoroughly inspect the product 

You can physically inspect the product.

Product range

Usually, they have a broad range of products because they are not bounded by physical space.

In-person sales have a low range of products because of the space problem

Delivery 

Need to wait for days to get the product

You can immediately take the product with you home

Audience

Global audience

Local audience

Customer experience

Lack of personal interaction with product and staff

It allows you to have direct interaction with staff and products


This comparison table helps you understand that each liquidation sale type has pros and cons. Knowing these differences will help you choose the best option for you.

Shopping Tips for Liquidation Liquidation Sales:


If you want to get more discounts in liquidation sales, then follow these tips:


Research prices and value

The first step in buying a product is to search for it online. This online research will give you basic knowledge of its features, product quality, and price overview. This step will help you decide on the product you choose with quality at a reasonable price.


Checking Product Conditions (New, Used, Refurbished)

Now that you have decided on your desired product, it's time to examine its condition thoroughly. Check that products are new, used and in good condition.


Reading Return and Warranty Policies

Check the product return policy and warranty. Liquidation companies often provide product warranty and return policies. These companies usually offer appealing discounts to attract consumers. When consumers are willing to buy their product, they increase product prices. So, to avoid this hassle, it is critical to read the return and warranty policy to aid in the aftereffects.

In Canada, consumer protection laws operate at provisional and federal levels. Federal law protects the consumer products sold in Canada. The provisional Consumer Protection Act highlights the rights of consumers and the duties of businesses.


Liquidation stores in Canada:


City

Store

Vancouver

Direct liquidation, Midland Liquidators, Surplus Saam’s Vancouver

Toronto

Z2A liquidation, Liquidation Deal, Direct Liquidation

Calgary

A to Z Liquidation, Super Binz Liquidation, Good Deal Liquidation Calgary

Montreal

Surplus Liquidation Center, Boom Liquidation Center



Role of salvage contracts in liquidation:

The two companies signed a formal legal contract, a salvage contract. The Canada Shipping Act and the international convention in Canada control this contract.

Buyers who purchase excess inventory in huge quantities use salvage contracts.

Salvage contracts play a vital role in these sales. For example, a company may have overstocked or damaged stock and want to eliminate that surplus product. In that case, it will hire experienced individuals called surplus liquidators or liquidation companies to help it do so. These salvage contracts will be signed between companies or individuals in this condition.


Conclusion:

In this blog, we have discussed detailed information on a liquidation sale. We discuss each element of the sale in detail and provide some tips that will help you benefit from it. These sales in Canada allow you to grab big home appliances and daily routine items at discounted prices. By understanding the different types of liquidation sales, why retailers hold them and planning correctly, you can save maximum money on these sales. You can benefit from these sales in Canada by researching prices and product quality, being aware of exchange and return policies, and taking the best approach to online or in-person liquidation sale that works for you. Take your chance to save money at a liquidation sale with proper planning and the right approach.


FAQs


What is a liquidation sale in Canada?

A liquidation sale in Canada is a sale in which businesses sell their overstock at discounted prices.


Why do businesses hold liquidation sales?

The straightforward answer would be that businesses want to get rid of their overstock, and they want to cash their overstock.


Why liquidation sale in Canada is so cheap?

These sales are cheap in Canada because companies want to eliminate their overstock. They sell at a discounted price so customers can buy these products. Another reason could be that businesses buy these stocks in bulk, reducing the per-item price.


What products can I find in the liquidation sale in Canada?

Many products, from daily life items to furniture and electrical appliances, are available in a liquidation sale.


What are the benefits of a liquidation sale in Canada?

You can get high-quality products at reasonable prices in liquidation sales.



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