Your strategy sounds pretty sound to me, however if you are going to put that kind of effort in it may not be a bad idea to also test the on-line market with a few products at the same time.
I think the liquidation market is still one of the best avenues for sales opportunities, but of course there can never be a guarantee of success in the sales game.
$500.00 would get you some sort of load from most liquidators, unless they were multiple pallet sellers, however shipping for a pallet would eat into that BIG time.
Depending where we ship in the US, a pallet can cost us anywhere from around $180-$300
Doesn't leave you much to buy stock.
There are a few important things you need to be aware of if you are considering moving into the liquidation market, and I'm more than happy to advise you on those issues, however you always have to bare in mind that surplus works like wholesale, the more you buy, the less you pay per unit........bigger potential to make good margin!
Having said that, smaller loads can get you going, but you would need to concentrate on smaller items. Now that may sound quite obvious, but what I mean is it is usually much better to buy a carton of perfume where you get 60 items at let's say $2.00 each, rather than take a carton with 6 large items that have cost you $10.00 each.
It's not the fact that you are getting more stock, it's the value of the stock you are getting. If a liquidator starts stuffing larger pallet style items into carton sizes for you, then you can be sure they will be charging you a premium on the price, so small purchases of big items in small quantities will come with a higher per unit cost.
The other problem with that scenario is that 99% liquidators don't give a rats what you get when they start breaking loads down in the warehouse.
Lets say you ask for a carton buy of kitchenware.
IF, and I mean if the liquidator agrees to the sale, the storeman will be told to make up the carton from a pallet load, and he won't care what you get, it will be what fits!
A pallet can find products like saucepans missing lids, lids missing saucepans and so on, but the odds are enough that the pallet will still have good potential for margin. Get a carton with a few pots without lids, and a few lids without pots.........and that margin may very well not be there!
When you buy something that is always sold by the carton, it always has more potential because that is the way it is always sold.
I hope all that made some sort of sense, but it's early...still haven't whipped the sleep from my eyes at the moment....lol
Feel free to PM me, happy to walk you through any aspect of the trade.