Note: Liquidations is a Beta program and is not freely available within the SellerPortal. Please contact our team if you are interested in using this service.
What is liquidation?
Liquidation is a great option to manage product that has not sold or that you do not foresee selling. Liquidations allows you to sell the product at a significantly reduced price in order to get some financial return versus paying ongoing storage fees for the product or disposing of the product.
Once you confirm with Flexport that we will process your liquidation, Flexport will remove your product from our warehouses within 10 business days. The product will then move to a Flexport sortation center where, Flexport and our liquidations partner will attempt to sell the product. If bought, these items are restricted from being resold on large marketplaces (such as Amazon), and typically end up at liquidation brick-and-mortar stores.
The product will remain available for sale for 30 days. After 30 days, if the product does not sell, the items will be disposed of by Flexport. At this time, if a seller elects to liquidate their product and it does not sell, we are unable to return the product to the seller or to a warehouse. We are constantly looking to improve our services and hope to offer additional options in the future.
To get started you will need to download and submit this contract to our Support team (Contact Support). You can prepare your liquidation items in this spreadsheet & copy them over to the contract.
How do I know once the product has sold?
Once the liquidation has been confirmed by Flexport, our team will provide you updates via email on the liquidation status of the inventory.
After the product arrives at a Flexport sortation center, it is posted for sale with out liquidations partner for 30 days. If the product is sold, Flexport will update you to confirm final sales price, fees, and the seller payout. This final payout amount will be paid within 30 business days.
In order for Flexport to remit payment to your account we require bank information to be provided in the Flexport Liquidations Agreement. You must also complete & submit a W-9 for us to submit payment to your account.
What if my product does not sell?
At this time, if the product selected to liquidate does not sell within 30 days of being listed for sale (total of 45 days after liquidation confirmed by Flexport), the product will be disposed of by the Flexport team. Once a liquidation has been initiated, we are unable to return the product to the seller or back to a warehouse, and disposal or donation is the only option. By initiating a liquidation, the seller relinquishes all rights to the product in the case it does not sell and commits to paying $0.75 per unit removal fee.
What can I liquidate?
Due to the cost of the liquidation process, the original retail value must be $8.80/unit or greater. Liquidations typically sell for 10-15% of original retail value but vary greatly based on the type of product..
As of now, only products in Flexport warehouses attached to particular regional sortation centers can be liquidated. Our team can confirm for you what product quantities are eligible for liquidation.
There are some categories of items that Flexport cannot liquidate at this point:
- food product
- any type of consumables (e.g., vitamins, etc.)
- animal/pest repellant
Flexport reserves the right to choose to liquidate or refuse to liquidate product outside of these restrictions at our discretion.
Liquidation Fee Structure
Liquidations fees and their definition are detailed blow.
| Fee Name | Fee Description | Fee Amount (per unit) |
|---|---|---|
| Inventory Removal | The cost to process your product at the originating warehouse (pick, pack, outbound). This is based on average processing rates across the network. | $0.75 |
| Liquidation Fee | This fee covers the cost incurred by the liquidations company to process the product. | 15% of liquidation sale price |
An example of the payout to sellers is detailed below for a single unit. Liquidation sales price is subject to change and not guaranteed to meet a certain value.
| Original Retail Price | $20.00 |
|---|---|
| Seller Wholesale Price | $6.81 |
| Liquidation Sale Price | $2.00 |
| Inventory Removal Fee | $0.75 |
| Liquidation Fee | $0.30 |
| Amount paid to Seller | $0.95 |
As shown above, for this specific scenario, the seller would recoup 14.8% of the wholesale price and 5% of the original retail price. This varies for every product based on the wholesale and retail value, and varies based on the liquidation sale price which will differ between every item.