When Overstock.com launched in 1999, their annual revenue was just over $1.8 million. In 2008, their annual revenue was $834 million. Shoppers love a good deal, which is why retailers like Overstock.com do so well. If you’re considering tapping into this highly lucrative industry by starting your own closeout overstock business, be prepared to put in a lot of legwork.

Things You Will Need
  • Business plan

  • Sales tax permit

  • Liability insurance

  • Location

  • Suppliers

  • Website

Step 1.

Write up a business plan identifying how much you can afford to invest in your business. A pallet of overstock merchandise may range from $2,000 to $10,000 depending on the type of goods you’re interested in selling. In addition to the merchandise, you’ll need a method of storing and transporting it (if you don’t intend to have someone else drop ship), as well as funds for a website, permits, licenses and marketing.

Step 2.

Obtain a sales tax permit and register your business. Some wholesalers may not work with you otherwise.

Step 3.

Do your homework. Create an account on eBay.com. Once registered, peruse completed listings to get an idea of popular brand names and what they typically sell for. Visit related forums to conduct market research on customers likely to buy the kind of merchandise you intend to sell. Check out online product reviews and prices of merchandise that you are considering investing in. Visit discount stores like Big Lots to compare prices against overstock merchandise that you’re looking to resell.

Step 4.

Find a location for your merchandise, if you don’t intend to utilize drop shipping. This may be a large garage or spare room within your home or a small warehouse.

Step 5.

Find suppliers. Contact manufacturers and national and local retailers directly to inquire about liquidations, overstock, off season or discontinued merchandise and shelf pulls. Start with companies listed on Overstock.com and other closeout websites. Compare online liquidators and wholesale suppliers by reviewing their "About Us" pages and customer reviews. Note how long each liquidator has been in business and their return policies. Many liquidators will drop ship. If you lack storage space, this may be a better option. Always pay with a secure payment method such as a credit card or Paypal.com.

Step 6.

Purchase a domain and website for your closeout overstock business. (See Resources for a list of web hosting companies.) Your web host should provide you with a number of free templates, marketing tools, 24-hour customer service and tutorials to help you design a relevant and catchy site that can garner traffic. Begin building your website by importing high quality images of your overstock merchandise and thorough descriptions for each item. You may be able to get stock photos from the manufacturer or retailer. Detail your return policy and your commitment to customer satisfaction.


Submit your products to Google feeds. Take advantage of any free Google Adwords or Yahoo credits. Review Google Analytics to analyze your customer traffic. Sell your overstock merchandise at flea markets as well as online.