What is a Liquidation Sale? How They Can Help You Save Money

What is a Liquidation Sale? How They Can Help You Save Money

Given the moderate cost of living and economic conditions in Alberta, finding ways to stretch your dollar is more important than ever. In this article, we'll explore what liquidation sales are, how they work, and how you can take advantage of the deep discounts to save money on products you love.

The liquidation market has seen significant growth in recent years, driven by an increasing trend of customer returns and rising sales of personal goods merchant wholesalers in Canada. Major retailers like Costco and Amazon have developed programs to effectively manage excess or returned merchandise, providing benefits to both sellers and consumers.

Source: Statistics Canada. Table 20-10-0074-01 Wholesale trade, sales (x 1,000) via Statista

Understanding the Basics of a Liquidation Sale

Liquidation refers to when retailers sell off excess inventory, customer returns, and out-of-season items at significantly reduced sale prices. These sales occur when retailers need to quickly clear out merchandise to make room for new products, generate cash, or close down a store location.

Types of Inventory in Liquidation Sales

Liquidation sales typically include a variety of inventory types:

  • Excess Inventory: Overproduced items or unsold products.
  • Customer Returns: Items returned by customers that cannot be sold at full price.
  • Overstock Products: Surplus liquidators carry items that exceed consumer demand.
  • Shelf Pulls: Items pulled from retail shelves to make room for new merchandise.
  • End-of-Season Items: Seasonal goods no longer in demand.
  • Refurbished Items: Products that have been repaired and tested for resale.

It's important to note that recalled inventory, hazardous materials, defective, expired, and damaged items are not eligible for liquidation.

How Liquidation Sales Work

The liquidation process can vary from business to business, but typically involves retailers selling their merchandise to wholesale liquidation companies, who then resell the products to consumers at deeply discounted prices. These companies often purchase the liquidation merchandise in bulk, in the form of liquidation pallets or truckloads, which allows them to offer significant savings to their customers.

Liquidation sales usually follows these steps:

  1. Retailers identify the merchandise they need to liquidate and package it for sale to liquidation companies.
  2. Liquidation companies purchase the merchandise in bulk at a fraction of the original retail price.
  3. The liquidation companies sort, inspect, and repackage the merchandise for resale to consumers.
  4. Consumers purchase the liquidated merchandise at discounted prices, often through liquidation stores or online marketplaces.

Major Retailers Involved in Liquidation Sales

How Amazon Liquidation Works in Canada

Amazon's liquidation program helps Canadian sellers manage excess inventory and customer returns effectively. By participating, sellers can recover value from unsold stock, free up warehouse space, and improve cash flow.

The Amazon Liquidation Process

  1. Amazon identifies items eligible for liquidation based on sales performance and inventory age
  2. Items are graded and sorted by condition
  3. Liquidation lots are created and listed on marketplaces for buyers to bid on
  4. Sold lots are shipped to buyers, and unsellable items are properly disposed of or recycled

Amazon Liquidation Auctions

Amazon partners with B-Stock to offer a dedicated marketplace for business buyers to access bulk quantities of returns and overstock merchandise at discounted prices. Approved buyers can browse lots, place bids, and arrange for payment and shipping upon winning.

How Costco Liquidation Works in Canada

Costco liquidates customer returns, overstock, and shelf pulls through auctions and salvage contracts. Buyers can acquire high-quality, brand-name products at discounted prices.

The Costco Liquidation Process

  1. Costco identifies items for liquidation, including returns, overstock, and shelf pulls
  2. Products are graded based on their condition (A Grade or B Grade)
  3. Liquidation lots are created and sold through auctions or salvage contracts
  4. Buyers arrange for payment and shipping of purchased lots

Costco Auction Marketplace

Costco also partners with B-Stock to offer liquidated inventory through a dedicated auction marketplace. Buyers who have been approved can explore available lots, submit their bids, and make arrangements for payment and shipping once they win the auction.

Salvage Contracts

Larger buyers can purchase returned merchandise in bulk through salvage contracts. These agreements provide a steady supply but require ample warehouse space and the ability to handle large volumes regularly.

Benefits of Shopping at Liquidation Sales

Shopping at liquidation sales offers numerous benefits for budget-conscious consumers:

  • Steep Discounts: Access significant savings on various products by buying liquidation merchandise at lower prices than those paid through traditional distributors.
  • High-Quality Products: Liquidation sales often include name-brand and high-quality items that you would find with major retailers.
  • Diverse Inventory: A wide range of product categories is available.
  • Bargain Hunting Experience: The ever-changing inventory creates a shopping experience where consumers can discover unexpected finds at great prices.
  • Stretch Your Budget: Liquidation stores allow shoppers to get more value for their money due to heavily discounted prices.
  • Membership Benefits at Costco: Costco's membership model offers additional perks such as cash-back propositions, enhancing the overall shopping experience.
  • Competitive Pricing at Costco: Costco has been found to offer more competitive pricing compared to Amazon on many household staples, with around 25% cheaper prices in some categories.

Tips for Finding and Shopping at Liquidation Stores

To make the most of your shopping experience at liquidation sales, consider these expert tips:

  • Specialized Platforms: We recommend checking out specialized liquidation stores online or in-person to find the best deals.
  • Sign Up for Alerts: Join mailing lists or set alerts on online marketplaces to get notified about upcoming sales.
  • Inspect Merchandise: Check product conditions before purchase and understand the return policies.
  • Customer Service: Reach out to liquidator customer service for any questions.
  • Frequent Visits: Since inventory changes frequently, visiting local options regularly increases the chance of finding better deals. If you’re not sure where to start, you may find our guide on liquidation in Calgary helpful!


Liquidation sales offer a fantastic opportunity for informed consumers to save money on high-quality products. By understanding how these sales work, knowing where to find the best deals, and employing smart shopping strategies, you can make the most of your liquidation store experience.

Remember to approach these sales with an open mind, a keen eye for quality, and a commitment to staying within your budget. With a little patience and persistence, you'll be amazed at the incredible deals you can find. Savvy shoppers and businesses can greatly benefit from understanding and utilizing liquidation sales to stretch their budgets further.

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