What percent of retail should you pay for closeout goods?

What percent of retail should you pay for closeouts?

There is no single right percent of retail. Take your realistic resale revenue, subtract landed costs, expected losses and the profit you need, and what is left is the most you can pay. Divide that by verified retail and you have your percentage. Two buyers can look at the same load and both be right with different maximums.

The trade talks in percent of retail because it is quick. But the percentage is the last thing you calculate, not the first thing you decide. Start from a figure you heard ("never pay more than X") and you will overpay on loads with inflated retail and pass on good loads with honest retail.

The formula

Write it like this:

Maximum % of retail = (Net resale revenue − Landed costs except purchase price − Loss allowance − Target profit) ÷ Verified retail × 100

Where:

• Net resale revenue = for each line, your realistic selling price in your channel × the units you expect to sell in a reasonable time, minus selling costs (marketplace fees, card fees, outbound shipping, store labor).
• Landed costs except purchase price = freight in, accessorials, handling, sorting, storage and payment fees. Duties and brokerage too if you import. The full list is in how to calculate landed cost.
• Loss allowance = units that arrive damaged, missing or unsellable, valued at what you paid for them.
• Target profit = the gross profit you need from this load, sized to its risk.
• Verified retail = the retail total for lines you could check against the exact product. Lines without a verified comp should not inflate the denominator.

Step by step: setting your maximum

1. List what you will sell and where. Retail store, bin store, online marketplace, export customer. Your channel sets your price.
2. Price each major line at your real resale price. Use what the exact item actually sells for in your channel and condition, not MSRP.
3. Estimate sell-through honestly. What share sells in the time you can afford to hold it? Price the rest at salvage value or zero.
4. Subtract selling costs. Fees, shipping to customers, returns, labor.
5. Subtract landed costs other than the purchase price. Get a real freight quote before you bid.
6. Subtract a loss allowance. Bigger for returns and unmanifested loads, smaller for sealed cases.
7. Subtract your target profit. Decide it now, before you see the asking price.
8. What is left is your maximum price. Divide by verified retail to express it as a percentage.
9. Compare with the ask. If the ask is above your maximum, counter with terms or walk away. Do not stretch.

Worked example

Letters stand in for the numbers, because every one of them comes from the buyer's own business, not from the market. A buyer who runs a discount store looks at a manifested load of housewares and fills in the lines in order:

Now the percentage. The manifest shows a retail total, but the buyer checks UPCs on the largest lines and can match only part of it to the exact product. Call the verified part R. The maximum, as a percent of verified retail, is (M ÷ R) × 100. The buyer writes that down before reading the seller's asking percentage.

Look at what drove the answer: the store's own selling price r and its own sell-through S. A buyer selling online, with higher prices but also fees and shipping, would get a different M from the same load. And if the buyer had divided by the full manifest retail instead of R, the percentage would have looked lower and the deal better than it is.

How does your sales channel change the answer?

Your channel changes both sides of the formula. It sets your resale price and your selling costs, and it decides how much of the load you can actually move. That is why one buyer's comfortable percentage is another buyer's loss on the same goods.

If you sell in more than one channel, price each part of the load in the channel where it will actually go, not in your best channel.

What pushes the percentage up or down?

Condition sets the rough range. Within it, completeness, brand, season, packaging, dating, location and terms push the number one way or the other. The table ranks the condition types from highest to lowest typical percentage. The bands overlap and move by category, so a strong shelf-pull load can beat a weak overstock one. Use the ranking to sense-check your own maximum, never to replace it. Where enough sold deals exist, the live range shown on this page gives current numbers.

Across all conditions, these also move the number:

• Take-all versus pick. Taking everything usually earns a lower percentage. See what is a take-all deal.
• Freight distance. The further away, the less you can pay for the goods themselves.
• Expiry dates. Short-dated consumables drop fast.
• Channel restrictions. "No online" lowers value for online sellers but may not matter to a bin store or exporter.

Mistakes to avoid

• Copying someone else's percentage. A figure from a forum or a friend reflects their channel and their costs, not yours.
• Using MSRP as your resale price. You will sell below it, often well below.
• Assuming everything sells. The last share of a load can take longer to sell than the rest combined.
• Dividing by unverified retail. If the retail column is inflated, your percentage looks low and the deal looks better than it is. Read why percent of MSRP can mislead.
• Leaving out freight until after you win. A load that is cheap at the dock can be dear at your door.
• Using the same margin for every condition. Returns and unmanifested lots need a larger cushion than sealed cases.
• Stretching to "win" a load. There will be another one.

Where this fits

This guide is the buyer's core calculation. The closeout pricing pillar covers how the trade quotes prices and why tiers exist. If the ask is above your maximum, how to make a counter-offer that works shows how to bridge the gap with terms instead of just price.

Skyline Dealz counts a retail comp only where the UPC matches exactly and marks other lines "no verified comp", so you can see which part of the retail is verified before you offer. If you buy for resale, you can browse wholesale general merchandise or wholesale home goods and request access to see full load details and make offers.