The liquidation business is built on high stakes and fast inventory turnover, which unfortunately makes it a primary target for scammers. Whether you are looking for your first pallet or your fiftieth truckload, the risk of running into a fraudulent supplier is real. As an independent watchdog for the industry, we have seen every trick in the book.
To protect your capital, you need to move past the "deal of a lifetime" mentality and start thinking like a private investigator.
The most common scam involves a seller claiming to have a direct-ship truckload from a major retailer at a price that is significantly below market value. If the price seems too good to be true, it almost always is.
Scammers often use stolen photos from legitimate warehouses and high-pressure sales tactics to force you into a quick decision. Before you commit, consult our Liquidation Buyer’s Guide to understand what realistic market pricing actually looks like for various retailers.
Legitimate liquidation companies have a physical footprint. While many brokers operate from offices, the inventory has to exist somewhere.
Not all information on the internet is unbiased. Some "review" platforms are actually owned by the liquidation companies themselves, creating an echo chamber of fake positive feedback. We have seen many buyers led astray by sites that bury negative reports in exchange for a fee. For more on this, read our report on Biased Review Sites Exposed.
Never send a wire transfer to a personal name. Legitimate companies will have a business bank account that matches the name of the company on the invoice. Be extremely cautious of any seller requesting payment via Zelle, CashApp, or cryptocurrency, as these methods offer zero buyer protection and are nearly impossible to trace once the money is sent.
While some "raw" loads don't have detailed manifests, most high-value loads do. If a seller provides a manifest, pick five random items and check their current retail value and availability. If the manifest looks too perfect or the SKU numbers don't match the retailer's system, the document may be fabricated.
The liquidation industry can be incredibly profitable, but only if you survive the sourcing process. By performing due diligence and ignoring the "urgent" pressure from unverified sellers, you keep your business safe from the predators in the market.