Buying liquidation and closeout pallets

What is a liquidation pallet?

A liquidation pallet is one pallet of goods sold together at a single price. The goods can be new overstock, closeouts, shelf pulls, customer returns or a mix. In the US, almost all of them sit on a 48 by 40 inch pallet, the size standardized by the Grocery Manufacturers Association (GMA) and used across retail distribution.

There are three common ways goods are built on a pallet:

Our glossary explains the pallet and the gaylord in more detail.

Size, height and weight

The footprint is standard. The height and weight are not. LTL carriers set limits on how tall and heavy a pallet can be, and anything over those limits costs more or needs special handling. The limits differ by carrier and service, so check them when you request a quote, and give the real height and weight rather than a guess. A pallet of shampoo may be short and heavy; a pallet of plush toys may be tall and light. Both take one pallet space in a trailer, but they price very differently.

Who buys by the pallet?

• New buyers testing a category or a supplier before committing to bigger loads.
• Bin stores that want a steady weekly supply of mixed goods. See closeout supply for bin stores.
• Online resellers who need manifested goods with UPCs they can look up.
• Small shops and flea market sellers with no dock and limited storage.
• Buyers far from the load, where a truckload would be too much stock to take at once.

Pros and cons of buying pallets

How LTL freight works for a pallet

Single pallets move by LTL (less-than-truckload) freight. Your pallet shares a trailer with other shippers' freight and passes through one or more terminals on the way. The price depends on:

1. Distance from the ship-from point to you.
2. Weight and dimensions of the pallet.
3. Freight class, a code from the National Motor Freight Classification that reflects density, value and handling. Lower density usually means a higher class and a higher rate. For a mixed pallet, get the class from the carrier or your freight quote using its measured weight and dimensions; a wrong class on the bill of lading can bring a reclassification charge after delivery.
4. Accessorials: liftgate, residential or limited-access delivery, inside delivery and appointments all add cost.

Our guide on what it costs to ship a pallet by LTL goes through each charge. The logistics block on this page gives a live estimate.

How to judge a pallet before you buy

1. Read the manifest. Look at item names, quantities, UPCs and condition. Check a few retail values yourself; do not rely on the listed MSRP.
2. Count the units. Divide the price by sellable units, not total units.
3. Check the condition label. New overstock, shelf pull and customer return mean different things. Returns need a test and sort plan.
4. Look at the photos. Check how the pallet is built. Crushed corners and loose wrap travel badly.
5. Add freight. Pallet price plus freight plus your handling time is the real cost.

A worked example

Here is the method, with round numbers for illustration only. They are not market prices.

• Pallet price: say $800 for 400 units.
• Add the LTL freight estimate, including liftgate if you have no dock: say $200, for $1,000 in total.
• Subtract units you expect to be unsellable or damaged: if 40 are, you have 360 sellable units.
• Divide the total cost by the sellable units: about $2.78 a unit.
• Compare that cost per unit with what each item really sells for in your channel. If the typical item sells for $5, the pallet works; at $3 it probably does not, once your time is counted.

If the margin is thin before your labor and rent, the pallet is not a deal at that price.

Receiving a pallet

• With a dock: the driver backs in and you unload with a pallet jack or forklift.
• Without a dock: book liftgate delivery. The driver lowers the pallet to the ground; moving it from there is on you.
• Inspect before you sign. Count pallets, check the wrap and corners, and write any damage on the delivery receipt. Take photos.
• Store it dry and flat. Cartons absorb moisture from bare concrete over time.

Storing and turning pallets

Pallets take floor space, so plan for it. A good rule is not to buy more pallets than you can sort and put on sale before the next delivery arrives. Unsorted pallets stacked in a back room tie up cash and hide damage you might have claimed if you had opened them on day one.

When to move up to bigger lots

If you are buying several pallets from the same location every week, a partial or full truckload will usually cut freight cost per pallet. Our guide comparing pallet vs truckload vs container helps you decide, and are liquidation pallets worth it covers the economics in more depth.

Buying pallets on Skyline Dealz Marketplace

Approved members can buy closeouts on Skyline Dealz Marketplace, including by the pallet where a load allows it. Request access and set alerts for your categories and ship-from regions. Every listing shows the lot type, condition, ship-from location and a freight estimate to your address, so you can work out delivered cost before you make an offer.