I have just ventured to the seamy side of the wholesale gift market…a closeout show.  Have you ever wondered where the dollar stores go to buy their merchandise? It certainly isn’t the Atlanta Gift Show or the New York Gift Fair, where vendors try to outdo each other with the newest, brightest and best merchandise.

No, a closeout show is where goods that are no longer good enough go to die.  Some of our regular suppliers were represented there, with discontinued designs and items.  Some of the merchandise was purchased at closeout shows in other countries.  And some of it was, I’m sure, manufactured specifically to be sold at bargain-basement prices.

Why were we there? In search of a few specials that we could advertise to jump-start our 2009 sales in this sluggish economy. When we went into business some 35 years ago, we found a melamine mixing bowl at the Transworld Housewares Show that we were able to promote at an astonishingly low price, drawing attention to our new store.

We didn’t find that magic item at the show that we attended, but we did learn a few things about the world of closeouts. The first is that most showrooms have minimums of $1500 to $2000, and prefer to sell goods by the pallet. (If you are not familiar with pallets, they are wood platforms used for shipping large amounts of merchandise. Most pallets can easily carry a load of about 2,000 lb.)  That is a lot of stuff, especially if you are talking about small items, or price points of under $1.00.

The second is that looking for first-quality, salable merchandise at a closeout show is a bit like looking for a needle in a haystack — it may be there, but there is a whole lot more hay than needle.  You will have to look past, just to give you a few examples, magnetic sports kazoos, wine bobble-head corks, Talking Andy dolls from the movie “The 40 Year Old Virgin,” and toxic waste candy.

But the third lesson is that if you can buy merchandise from a closeout vendor (perhaps sharing with another store, if you can work out a payment agreement in advance), it may allow you to get a great margin on certain items.  I have been having trouble finding stickers on rolls, and there was a scrapbooking showroom at the closeout show that had stickers that normally sold for $30 a roll at just $3.00 a roll.  Of course I had to buy a lot of rolls, but happily they didn’t hold me to the $1,000 minimum.  That would have been 3,000 rolls!

Dean found a line of handsome off-brand gourmet knives that we will use as sale items, and took notes in several other showrooms.  Not much to show for our day’s journey into the nether world of closeouts, but it will be easy to recoup our expenses (they did offer a free lunch, which in fact was quite good, so we didn’t spend much on the trip).  And this adventure will make me appreciate all the sparkling new merchandise I expect to see at the upcoming winter trade shows. 

Happy Retailing,

Carol “Orange” Schroeder