No other business today has better fundamentals than the surplus and salvage business in South Africa. The trade in over-stock, short-dated, damaged, dented, and related products has boomed in recent years as SA’s cost of living soars.
It is so compelling that even PicknPay has entered via insourcing with their “reduced to clear” specials (under the guise of “reducing waste”) and Game with unbranded stores. Both in the past have ended up in the surplus and salvage streams or in auctions.
The why—the problem you are solving—is clear: South Africa’s cost of living is too high for most South Africans. Half of the country is on SASSA welfare and receives a monthly stipend that is only enough for a basket or two at traditional retail. The lowest-cost mainstream retailers, Shoprite in food and Pep in clothing, are too expensive for most South Africans.
That is why many South Africans have turned to buying surplus and salvage goods to stretch their budgets a bit further. This has opened up a lucrative opportunity for entrepreneurs.
As traders, we have a dream scenario: demand exceeds supply. But common sense tells you that when demand exceeds supply, then sourcing is difficult. Current operators (me included) guard their sources and their lives. That is their competitive advantage and, ultimately, their livelihood.
Once we have established demand or market need, we move on to the two most important parts of this business: sourcing and selling. I’ll flip it over by starting with selling. In order to keep the cost low, you need a low-cost sales channel. The most popular are municipal markets (often “flea markets”). I have seen a guy selling surplus and salvage go from a municipal market to an Inospace unit in what is possibly the only example I have seen of growing a business from very little in recent years.
Now onto the sourcing. There is no better way than to knock on the doors of anyone who could hold such stock. The second best option is to post “buy leads” on a lead generation platform such as sb2sb.com that some businesses use to offload “dead” stock and dump salvage products.
Go to www.sb2sb.com
Click on Signup and sign up. Verify email.
Fill in your personal details on the edit profile page, including location; add a logo, banner, and profile picture if you have one.
Next, click on the membership link on the top navbar or the “Activate” button on the user profile.
Membership costs R100 for 30 days. Click through to payment.
Once a member go to the salvage & surplus market, click on the green “Post Listing” button.
On the type select “Buy,” on the tag select “Product,” choose the right option (Surplus, Salvage, Wholesale Clearance, Shop-soiled, Job Lots, Rejects, Short-dated, Expired). Make sure you know the difference between salvage and surplus: the value has largely been written off vs. looking to recoup as close to cost as possible.
Add a title and description (product, price, quantity, quality, etc.) and click “Save.” If you want to be contracted directly and not via email, put your contact details in the description. Make sure you fill in your personal details, as your location is being pulled from there.
This is a good time as it’s quiet, there’s not a lot of competition, and just before companies offload, if there are already buyers and they are close by, they will contact you. Otherwise, check every few days and make sure you are logged in, as only members can reply to certain listings.
