The Truth About Wholesale Auctions


What are wholesale auctions? Wholesale auctions are sales of lots of wholesale, closeouts, overstock, shelf pull, salvage, and store return items, using a bid sales process. Companies, wholesalers, and retailers, will use auctions to dispose of their difficult to move merchandise, unsaleable products, and surplus products. While wholesale auctions can be a great way to buy a product in bulk at below wholesale prices, auctions can also be a minefield, which is why it is imperative that you understand why the auction is being conducted.

While many auctions are for merchandise that can be easily resold, there are also many auctions for merchandise that cannot be sold, either because the merchandise is damaged beyond repair, or there are regulatory restrictions associated with the products being sold. You should take your time to research the details of the auction, and visit the facility to inspect the merchandise being offered.

If you cannot inspect the merchandise, then I would strongly recommend that you bid on lots that are offered by trusted online auctioneers.

You can find many auction websites, such as,, and, that provide you with the opportunity to bid on the products of wholesale distributors, manufacturers, retailers such as national department stores.

Many auctions will offer manifested pallets, which means that you will know ahead of time what the contents of the pallets are. If a lot is not manifested, you should only bid if you are very familiar with the type of merchandise that is usually contained in those types of pallets.

For example, if you are bidding on a pallet of Walmart store return general merchandise, you are better off bidding only if you have experience in knowing what kind of general merchandise Walmart sells, and what kind of damages you can expect in their returned products.

There are many types of auctions, such as sales conducted on behalf of government agencies, such as auctions for New York State surplus vehicles, as well as auctions for seized products, such as auctions conducted on behalf of the US Treasury Department.

Since auction lots are generally sold as is, and are final sales, you should find out all applicable laws and regulations that pertain to the assets being auctioned off. You can always benefit by spending time speaking to the auctioneer prior to the commencement of the auction.

You might also be better off biding less for a pallet that has no manifest, as compared to a pallet that has a manifest, unless you are very familiar with the type of merchandise that you can expect, and are confident that you can sell it profitably. 

It is crucial to remember that most merchandise being offered at auctions is due to a distressed reason, meaning that for some reason this is the final way that the supplier can sell the merchandise. Suppliers know that auctions will give them the lowest return on their merchandise as compared to other sales channels, so a supplier will only use the auction format if all other sales channels have been exhausted. There is an exception, and that is when a supplier is dealing with such a large volume of merchandise, that offering their merchandise at auction is the most efficient way to dispose of their merchandise, and recover some of their costs for the merchandise.

Studies have shown that bidders can easily get carried away at auctions, and end up paying a lot more than they originally planned to, so it would be beneficial to you to set a limit bid ahead of time. You can calculate what the most that you can pay for the merchandise so that you can resell it at a profit, and then set your maximum bid accordingly.

If you prefer to bid offline, there are many auctions that are conducted on the premises of stores and warehouses, or in the offices of a lawyer, and you can usually inspect the merchandise and look at it as you bid on it. In New York and New Jersey, there are auctioneers, such as Eliot Millman, Michael Amodeo, David Maltz, and Herb Mauthner, who specialize in going out of business and bankruptcy sales.

You can find auctioneers in New York and New Jersey by visiting these links: