If the nation is collapsing, how do you profit on the way down?

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[–] • 1 pt

Okay - retail is the market set retail price in this scenario.

Say computers - market says the price for the computer is $1000.

Because it's a recession, some computer stores cannot sell their inventory and are forced to declare bankruptcy. Bankruptcy means the store can no longer pay it's bills, so it asks the court to appoint a trustee to liquidate the remaining inventory and wrap up the operations, with remaining assets distributed equitably.

The trustee comes in, and sends the inventory to be sold at auction. That inventory commonly is sold for 10% or less of market retail price. The trustee is not in the business of maximizing value of the inventory sold. The trustee is in the business of efficiently ending the business, and that means about as quickly as possible.

So, this is the inventory you want to buy. Inventory in distress sale condition. Inventory being liquidated that is usually sold for well below production cost.

You buy at 10% of retail, or less. It should become obvious that this stage involves a fair amount of shopping. You can short cut this process by dealing with large liquidators where you can still get bulk deals at a slightly higher than auction price.

If the store has 50 computers in inventory at the time of liquidation, there is a good chance you can purchase some or all of those computers for $100 each.

Now, selling at 50% off retail. Why so cheap? Because you want to move these goods as rapidly as possible. Because there is a recession on, consumers are extra focused on maximizing the purchasing power of their money. They are looking for deals, and will go the extra mile in order to get deals. Remember, credit is tight during a recession.

You enter the market with computers at $500 each. Undercutting the market by 50%. These are grey market products. Liquidation. End of line. One time sales. Available only while supply lasts.

You bought at $100, and sold at $500, and earned a 400% ROI.

Okay - retail is the market set retail price in this scenario. Say computers - market says the price for the computer is $1000. Because it's a recession, some computer stores cannot sell their inventory and are forced to declare bankruptcy. Bankruptcy means the store can no longer pay it's bills, so it asks the court to appoint a trustee to liquidate the remaining inventory and wrap up the operations, with remaining assets distributed equitably. The trustee comes in, and sends the inventory to be sold at auction. That inventory commonly is sold for 10% or less of market retail price. The trustee is not in the business of maximizing value of the inventory sold. The trustee is in the business of efficiently ending the business, and that means about as quickly as possible. So, this is the inventory you want to buy. Inventory in distress sale condition. Inventory being liquidated that is usually sold for well below production cost. You buy at 10% of retail, or less. It should become obvious that this stage involves a fair amount of shopping. You can short cut this process by dealing with large liquidators where you can still get bulk deals at a slightly higher than auction price. If the store has 50 computers in inventory at the time of liquidation, there is a good chance you can purchase some or all of those computers for $100 each. ---------------- Now, selling at 50% off retail. Why so cheap? Because you want to move these goods as rapidly as possible. Because there is a recession on, consumers are extra focused on maximizing the purchasing power of their money. They are looking for deals, and will go the extra mile in order to get deals. Remember, credit is tight during a recession. You enter the market with computers at $500 each. Undercutting the market by 50%. These are grey market products. Liquidation. End of line. One time sales. Available only while supply lasts. ------ You bought at $100, and sold at $500, and earned a 400% ROI.

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[–] • 0 pt

Suggestions on where to look for liquidation packages?

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[–] • 1 pt

Most Western jurisdictions require bankruptcy auctions to be publicly posted somewhere by law, since they are conducted at the behest of the local sheriff / judge. The are commonly posted in the public notice sections of the local community paper, for example.

So that one place to start.

There is an entire liquidations infrastructure side to the retail economy that most people are not familiar with. Like insurance claims - when a cargo container is in an accident - the insurance companies just pay off a flat fee for the entire container, regardless of the actual damage. Often some or all of the contents are fine, but all of that is now sold off through liquidations as grey market product. Again, it sells off cheap, because it is no longer in the regular retail channel.

Another example is leasebacks. Corporate leasing - say laptops again - corps will get a lease for laptops for all of their employees - say 50,000 laptops, for a two year lease. These are not retail sales laptops - they are a special manufacture order, and come in a non retail box, but otherwise are basically identical to the retail laptops because they come off the same assembly line. After two years, all 50,000 laptops are returned to IBM, or whoever, and they are then dumped into the grey market to be sold off as leasebacks.

So you see - the liquidations world is not just bankruptcies, rather it encompasses the entire end of life cycle for manufactured products of all kinds, who now need to be sold off for a variety of reasons.

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