How To Make A Passive Income in the Liquidation Business

How To Make A Passive Income in the Liquidation Business
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The best definition of passive income is – Building online businesses that take advantage of systems of automation that allow transactions, cash flow, and growth to happen without requiring a real-time presence.

This means you invest your time straight into creating valuable products and experiences that assist others, all the qualities of a good business.

Online businesses take far less money to invest and the rewards come in much faster, plus it creates something you can become known for.

How Liquidation Business Works

Setting up a liquidation business is a piece of cake, anyone with a chair and a strong internet connection can do it, albeit patiently.

The main business strategy behind liquidation is to attend auctions and clearance sales to purchase large capacities of items, which you will later re-sell independently at a profit. Retailers usually want to keep their merchandise on the shelves for as short a time as needed because the carrying costs drags them down.

So to get rid of overstocked merchandise, they sell it at a flat discount and you need to keep an eye out for those.

It’s pretty much a win-win since the retailer gets rid of their overstock and you get to make a profit off of it.

How to go about it

There are various ways you can choose to sell your merchandise.

Here are a few to get you started:

Your Website

If you’re thinking of creating a business for yourself by venturing into the liquidation business, you can consider creating your own website.

This ensures maximum profit and complete control over your selling process. Basically, you’re the boss. It does take extra work but every great business is built from the ground.


If you’re not sure about starting your own website, start small. Sell on Ebay to get a feel of how your business will take shape.

The only drawback is seller websites such as Ebay take a cut of every transaction so you need to account for that in your pricing.

Another drawback is that you’ll have tough competition when it comes to pricing. Consider all your options before choosing Ebay and if you think you can still make a profit off of it, go for it.


Another big daddy of retail is Amazon with a global audience you need to reach out to if you’re looking to expand.

Amazon provides good service when it comes to packing and shipping so you don’t need to do any of that. You just need to pay the required fee and you’re good to go. Amazon is a good way to start.


Craigslist can be slightly tricky. You need to reach a local market and interact with one customer at a time. It’s more time consuming and there’s more work for you but it’s a good avenue to sell smaller items.

Flea Markets

A good way to attract a crowd is by setting up shop at a flea market. You can make a part time income by selling your finds at a local flea market.

You’ll have to rent a booth and device a sales pitch, so plan your prices according to that.

Garage Sales

Garage sales are pretty much like flea markets but at a smaller scale. You don’t need to rent a booth or set up an online shop.

You can sell at your own device and earn a good profit without doing much work. No one takes any cut out of your profit and you dictate all of it.

At Last

All businesses start with a great business idea but you need to consider the risks as well. Most entrepreneurs fail to consider inventory that is difficult to sell regardless of the price while purchasing inventory.

The best type of products to purchase are power and hand tools, books, music CDs, toys, non-perishable food items, electronics, etc. But this is only ideally, there is no guarantee in any business venture so you need to thread carefully anyway.

What you need to do is stay clear of products that have a limited shelf life, or that need unnecessary warehousing and transportation requirements.

To achieve profit, you need to plan it well, research and consider things such as sales volumes, markups and product costs. The liquidation business can be highly profitable, but only if played right.

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Paschal Okafor is NaijaTechGuide Team Lead. The article How To Make A Passive Income in the Liquidation Business was written by Paschal Okafor. The article was last modified: January 19th, 2021
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