What are Stock Lots?
Branded Stock lots are excess / surplus lots of products offered by brands, liquidation stock wholesalers, traders and distributors. These products are usually old season’s stock liquidated in bulk quantities to 1 or 2 people.
For Example- A footwear shop owner sees an opportunity to buy in bulk branded shoes – 200 assorted pieces of Nike or Adidas or Puma. Suppliers offer these shoes to the footwear shop owner as a stock lot, at a discounted wholesale price to further sell it to its customers.
If the articles are from old season’s stock then the shop owner can buy the stock lot @ around 65- 75% of MRP discounted price – depending on brands, source, material quality and type of product- mix in the stock lot. If the stock is just 1 season or 5-6 months old then brands would bulk sell it at around 60% off on MRP. Taxes would be extra (GST @ 18% is charged if the article price is above Rs 1000).
It’s advisable that the shop owner understands the stock lot product- mix in terms of fast selling sizes and designs and then chooses to buy in bulk as per demand at his/ her shop.
You can buy Branded Stock Lots in India here.
Types of Stock Lots:
Assorted stock vs. Set wise stock
In assorted stock lots articles/ products are found to have different designs, type of products and sizes. Whereas, in set wise stock lots, same articles with same design are found but in varying sizes with varying quantity ratios across sizes (like 1:1:2:2:1:1 for shoes sizes 6:7:8:9:10:11). If the stock lot is set wise chances are high that they are not original as the running sizes and designs would have gotten sold earlier; only exception to this being a case where designs across all sizes are very old and hard to sell.
Fresh inventory stock vs. E- commerce liquidation stock
Fresh inventory stock lot is sold by brands and their authorised distributors which comprise of new and running season articles whereas, E- commerce liquidation stock is sold by e-commerce owned sellers like Cloudtail (Amazon) and W S Retail (Flipkart) which comprise of old season (2-3 seasons) articles.
Unsold stock vs. Return stock
Brand or E- commerce liquidation stock lot can be categorized further in two types – Unsold stock / dead stock comprise of those articles which the brand/ manufacturer or the e- commerce players like Amazon and Flipkart are unable to sell. Unsold stock is usually more than 2 years old. Return stock comprise of those articles which are ordered by customers but returned due to failure in payment (like COD), logistical issues or returned by customers. Some of the articles in Return stock can be found to be dirty/ damaged. Vendor sells the return stock at higher rates if he removes the dirty/ damaged pieces. Return stock comprise of articles which are ordered- running sizes and designs.
Genuine stock vs. Fake or First Copy stock
Genuine stock lot comprise of original articles with brand bills whereas, Fake stock lot comprise of copied (first copy), damaged and rejected stock produced and sold illegally.
Key Points to remember while buying stock lots:
– If you don’t find the brand bill then the products are not original.
– A brand or e- commerce liquidation stock lot comprises of original products only if they are old season’s stock (2-3 seasons old) and Assorted–
If you find latest products in liquidation stock which are new and running in brand showrooms then those products are fake/ duplicate. Remember it’s almost impossible to find original liquidation stock lot to be set wise.
– Factories or unorganized players cannot sell branded products (excess / surplus stock) with brand labels –
It’s illegal to sell and buy stock lots/ products from such unauthorized bodies selling products with brand tags. Export surplus can be legally sold only when their brand labels are removed.
– Original branded products/ stock lots can be sold only from those brands or their authorized distributors –
Factories selling excess or brand rejected stock with brand labels is illegal and there is a high chance that the products are not brand originals.
– Many unorganized wholesale players in marketplace sell fake products in the name of original bills –
For example, A wholesaler bought 10,000 pieces of a brand ‘x’ original products once. But later on he started bulk selling fake or duplicate products by showing the original bill of earlier bought 10,000 pieces; but not the actual bill of the duplicate articles sold.
– Make sure you buy stock lots from authorized sources only like the brands or their authorized distributors-
to avoid legal punishment and unethical and misled buying/ selling of products. Buy only from GST registered and reliable companies with proper authorization.
– E commerce liquidation Return stock lot comprise of genuine products only when it’s sourced from e- commerce authorized/ owned sellers-
Like Cloudtail (Amazon) or WS Retail (Flipkart) and so on; or through channels who are buying from Cloudtail or WS Retail. Return stock lot in such cases come packed in e- commerce brand labelled boxes with return slips. And Return stock lot do not come set wise.
– E commerce liquidation Unsold stock lot will be from 2016- 17- 18 (if bought in 2020). And original products can be sourced only from Cloudtail (Amazon owned seller) or WS Retail (Flipkart owned seller).
Remember there are many unauthorized sellers online and offline claiming to sell original products which is illegal and buying from them brings in a lot of problems pertaining to legal action and penalty.
– It’s advisable not to buy in very large quantities of stock lots with mixed variety of articles which can lead to dead stock piling up in your showroom.
Try to buy in small quantities of stock lots which are fast selling in your shop.
– Make sure to distinguish between what is original and what is fake or duplicate.
Follow this blog for more info: How can Retailers check that the shoes they want to buy are ORIGINAL or COPY
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You can buy Branded Stock Lots in India here.