May. 13, 2024
Machinery
A big trend among some online sellers is buying Amazon return pallets and overstock and flipping the items for big markups. Here’s a full run-down to help you get started.
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Amazon customers have 90 days to return items for any reason. It often does not make sense for sellers to pay Amazon to ship items back which means they get liquidated instead. Amazon often unloads these pallets of returns to secondary markets and puts them up for auction.
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You are getting a pallet-load of retail items at a greatly reduce rate. The more you buy, the lower the price for each item. The goal is to turn those items around and resell them at a regular retail rate for a big markup compared to what you paid.
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Then you break-down the pallet and sell whatever you can:
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There are a number of liquidators that distribute returns and overstock from major retailers. These are the most well known and convenient to use:
Bstock is partnered with and hosts the official Amazon Liquidation store. Pallets are sold as auctions. You get a general description and maybe a couple of pictures, but otherwise the quality of the items is a complete shot in the dark.
Bstock also offers pallets from other major retailers like Walmart, Target, Wayfair, and Home Depot.
This site is different in that it does not run auctions. If you see a pallet you like, you just go ahead and buy it.
The pallet images give you a much better view of the items so you can see what is included. Listings also include a manifest so you can see exactly what you are buying. That does not mean items are not broken, but you do get a nice list of what’s being offered.
BULQ arranges freight for shipping to your address. Just let them know if you have a loading dock, or if it’s being delivered to a residential address.
Like Bstock, Liquidation.com also offers Amazon pallets through auctions. The images in the listings are generic retail images, but you do get a manifest of items in the pallet.
Amazon arranges the shipping through their providers.
The other major benefit of Liquidation.com is that they offer pallets from other brands like Walmart and Target, as well as Sony, CVS, Lowes, and more.
DirectLiquidations.com is also an auction site, however it does not focus on Amazon pallets as much as the others. Instead, they have a lot of pallets from major retailers like Walmart.
The big difference with DirectLiquidations.com is that they offer far more shipping options. Considering how important shipping costs are to your profit, that can be a big deal.
bluelots.com is another auction site that offers pallets. They a smaller selection of inventory than the other major liquidators, but the listings are very detailed. They have multiple images of what’s included as well as a detailed manifest.
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The main season to buy pallets is after the holidays. Those months early in the year will be the best time to pick up pallets because there will be a lot of stock available.
Consider how you will receive your pallet and talk to the company making the delivery. A full-size truck normally needs a loading dock at a warehouse location. If you are shipping the pallet to your house or somewhere else, you will need a box-truck with a lift gate to get it down. You could also drive to the trucking terminal in a pick-up truck or with a trailer and arrange for them to load it for you.
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MSRP is the ‘estimated retail value’ of the items on the pallet. It does not account for how many items are broken and damaged, shipping costs, all the fees from buying the pallet and selling the items, or any other costs that you’ll pay along the way. You need to buy the pallet for as low as possible to make any profit.
Buy pallets near your location so you don’t have to ship them far. Depending on what category the products are, the shipping charges will usually cost more than buying the pallet itself. If you have the pallet dimensions, weight, and source location, you can get shipping quotes beforehand so you have a rough idea what the cost will be before you buy the pallet.
If you are buying multiple pallets at a time, some platforms or sellers may allow consolidated shipping. Assuming the pallets are being shipped from the same warehouse and being delivered to the same destination, they can be combined into one truckload to save money. Check with the seller or the company running the auctions to see if that is an option.
If you resell items on Amazon, expect to lose a third of your profit in fees. Ebay also charges around 15 percent for fees. Keep track of the fees on each platform you use to sell items and make sure they are not killing your profit margins.
Another avenue is to sell your products locally through craigs list, OfferUp, letgo, or facebook. The fees will be much lower, but the down-side is it’s a much smaller audience viewing your products. You could also consider local flea markets or a garage sale as a way to convert excess items into cash.
A working product in original packaging will earn a much higher price. Test your products to make sure they work. Fix and refurbish the ones that don’t. If possible, try to find or repair the original packaging. Sometimes you can find original boxes on Ebay. Finish the product with shrink wrap to make it look new.
Selling a complete product will be worth more than a partial set or incomplete item. Maybe a toy set is missing a piece, or an electronic is missing an accessory. Consider buying a missing part off Ebay or other second-hand marketplace to complete the set and increase its’ value. You want to present your items as close to ‘new’ as possible.
If an item can’t be repaired, sell off the parts. Undamaged packaging and original boxes can sometimes be sold on Ebay. Donate items you can’t sell to a charity for a potential tax write-off.
If other resellers are selling the same items, competition will hurt your profits. You will be undercutting each other to move the items and their value will go down. Keep an eye out both for over-represented products that are losing value, and for opportunities where you can sell items that other sellers are not offering.
Unless you are an authorized seller, these restrictions could be for specific products, specific lines, or everything related to the brand. Check your items against the Seller Assistant app to see which items have restrictions. You can also use the AZInsight browser extension.
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You don’t need much to get started other than a reseller certificate and a place to ship the pallet. You’ll need a workspace to break-down the pallet, pack-up items, and do repairs on broken products. You will need some shipping supplies to pack your products for buyers, or shipping back to Amazon.
You just need a reseller certificate, the money to buy your first pallet, and somewhere to sell your items. If you are planning on reselling them online, you will need seller accounts setup on your chosen platforms. You will also need a bank account setup to receive payments from selling your items.
You can potentially earn a big markup on items. If you get branded products in decent condition and can sell them at full retail prices, there’s good money to be made. It’s not easy, and the pallet you buy will always be a gamble, but there is profit if you are willing to put in the work.
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The success of flipping pallets depends on your legwork, ability to find good deals, and keeping costs low. Having to hire employees will chop through your profits and your business will have a hard time staying viable.
The value of pallets will change greatly based on chance. Some will earn a good return and others will be duds. The availability of pallets will change throughout-the-year and you won’t always be able to find good deals.
Ideally, the items you get in your pallet will sell right away, but that’s not always the case. You may have items that many other sellers are also trying to move and they don’t sell quickly. You may have items that are no longer in-demand and traffic to the listings is slow. Or it could be that a lot of the items in your pallet need repairs and you are stuck trying to fix everything. There’s no guarantee that your items will be quick flips.
You may start out working in your garage breaking down pallets, and you will have items in various states of; waiting to sell, needing repairs, selling as parts, or packing up. Over-time as you process more pallets, the number of items you have hanging around will grow and your space-needs will increase. Eventually you may find that you’ve outgrown your workspace, or you end-up having to cut your losses and dispose of excess items.
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Finding an Amazon pallet can earn you a bunch of money. You are looking for pallets that are close to your location, that you can identify will resell well, and hopefully are in reasonable condition. On good pallets, you can get great markups. But there’s always the chance you’ll get stuck with a bad pallet. There is profit to be made, but every pallet you buy is a gamble. Like any gambling; do your research beforehand, keep your loses low, and hedge your bets in your favor at every opportunity.
Last Updated: Jan 4, 2024.
Added: Step by step guide to purchasing Amazon return pallets.
Amazon is the leading online retailer with millions of daily product sales. Some items are returned for various reasons and these are sorted into pallets and sold to third-party buyers at a discounted price, known as Amazon return pallets.
Buying these pallets can be profitable but also challenging without proper knowledge. Our guide provides a comprehensive overview of the benefits, challenges, where to buy, what to look for, and tips for successful buying. Whether you’re a seasoned reseller or a beginner, this guide will help you make informed decisions.
Making online purchases is the new normal nowadays and sellers keep competing for a market share in every segment. Online platforms such as eBay or Amazon are the best place to look for a product and more and more retailers open online stores on these platforms, in addition to their own websites, to gain access to a wider, global audience.
With a global reach come global issues. Online purchases are convenient, quick and easy. However, the other side of that coin can turn into a logistical nightmare for the seller: customer returns.The reasons for product returns are plenty and in fact, 30 percent of all online purchases get returned, whereas just 8.9% of goods are returned to brick-and-mortar stores. Around 49% of retailers in the United States now offer a free returns shipping policy and customers – especially younger online customers – now expect this.
This has led to an explosion in the amount of products being returned across the whole retail sector, with 62% of customers now saying they would be more likely to shop with a particular retailer if it has a free returns policy. This in turn generates more and more returns, and those returns have to go somewhere.
Retailers and Amazon sellers do not put a large portion of these returned products back on sale as new, even though many of these products return unopened. Instead, they look for other ways to sell that merchandise: they liquidate it.
So if you are in the market for Amazon Return Pallets packed with either random merchandise or sorted in specific categories, you should continue reading and check for yourself how you can buy Amazon Customer Returns and extract the maximum gains out of these Amazon Returns pallets.
Source: Statista, 2020.
Amazon has been criticized for destroying millions of items, and now has the stated intention to work “toward a goal of zero product disposal.” There are now programs in place to allow sellers to resell customer returned items, or to allow them to be sent to the liquidation market.
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Related links:Amazon third-party sellers told CNBC they end up throwing away about a third of their returned items.
Amazon now gives sellers four options (subject to a fee) for dealing with items that they can’t sell as new: Return to Seller, Disposal, Liquidation, and Fulfillment by Amazon Grade and Resell (at the moment by invitation only).
There is also liquidation, which Amazon now offers sellers as an option instead of disposal.
Amazon partners with liquidation marketplaces, which auction off unwanted inventory to resellers by the pallet or even truckload. Sellers can recover around 5% of the sale price if the product is liquidated.
With the ‘Return to Seller’ option, the return leaves the Amazon warehouse and gets back to the seller for their processing. For non-electronic items, you will find that many items are simply relisted if they have never been opened. If the items have been opened, what happens to them will depend on the seller (whether Amazon itself, or a 3rd party seller on Amazon), and the value of the item. If the resale value is worth the cost of repairing, cleaning, testing, or repackaging, many sellers will choose to do so, as long as the margins are there to make this worth their while.
Electronics are a different case. A large number of electronic items returned to Amazon are subject to an inspection, and then repaired if necessary. After this process, they are listed on Amazon Renewed. This is the place where customers can purchase Amazon returns that are guaranteed to be working as new while spending a lot less than they would when buying a brand-new item.
However, it is not that easy to be included in Amazon Renewed. Unlike new items, the strict rules set up by Amazon make it harder for third-party Amazon sellers to sell refurbished items through Amazon. Sellers are required to follow a list of stringent rules.
And what about the returned items that don’t get resold through Amazon? A portion of that merchandise is put in pallets and liquidated.
When sellers use ‘Fulfilled By Amazon’ (FBA), the categorization of customer returns is done by the Amazon fulfillment center. The merchandise is labeled as either sellable, damaged, customer damaged, defective, carrier damaged, or expired. If damage is incurred by the courier or Amazon staff the merchandise is transferred to Amazon ownership, and the seller is compensated. Amazon sells this type of returned merchandise by the truckload.
One of the most significant benefits of buying Amazon return pallets is the lower cost compared to buying new products.
If you’re looking to save money on inventory costs and are willing to take on the risk of potentially receiving items in less-than-perfect condition, buying Amazon return pallets can be a smart business decision.
Buying Amazon return pallets means you can source a lot more merchandise for the same cash outlay, compared to buying all new items wholesale. As with any business there are risks but you can make your money go further if you are willing to put in some work to improve the salability of the merchandise once you receive your inventory.
Buying Amazon return pallets comes with the benefit of having a wide variety of products available. These pallets can contain a range of products, from electronics and household appliances to clothing and accessories. This variety allows buyers to select the pallets that best suit their need. In addition, the variety of products available in Amazon return pallets can also be an advantage for businesses that are looking to diversify their product offerings, since Amazon offers products in more than 25,000 sub-categories.
Buying Amazon return pallets is also a sustainable option. Rather than these items being thrown away, they are being given a second chance at finding a new home. This makes buying Amazon return pallets more environmentally sustainable.
The best way to buy Amazon return pallets is through liquidation companies. When searching for a merchandise source, you are advised to look for the most reputable seller. This is best reflected in customer experience. Therefore, you should look for the advice of other online resellers who have sourced their merchandise through those companies. The best way of getting this is by looking for online reviews, which tend to give a clear picture of a company’s services and product quality, which in turn reflects on a company’s reputation.
Direct Liquidation is a highly reputable company that strives to and succeeds in keeping customers satisfied while forging and developing partnerships with major retailers. This means that at Direct Liquidation’s online platform you will be able to buy not just Amazon returns, but merchandise sourced from other retail giants like Walmart, the largest retailer in the United States.
Source: Business 2 Community, 2016.
There are four main types of Amazon returns truckloads:
These truckloads contain 26 tall pallets, mostly consisting of large items, such as televisions, large appliances, display cases, furniture, and similar merchandise. These lots are ideal for larger retail stores with space to accommodate these items for sale locally.
Smalls truckloads contain small items of merchandise. As you can fit many smaller items into the Gaylord pallets, the average piece count is very high. Some of this smaller merchandise can be very valuable and may contain designer sunglasses or watches, electronics, and branded accessories. This type of merchandise is perfect for bin stores, and for online sales. Due to the huge piece counts of potentially very high-value items, these truckloads often contain the most profit potential on resale. The high number of different products you will receive in these lots may be very time-consuming to process, especially for listing online but should give you the best return on resale on your initial investment.
These truckloads contain the most popular items for resale, but in lower quantities. They contain 26 pallets with lower item-counts than the smalls truckloads, but are more likely to contain the strongest retail items, that are particularly sought after by online sellers. These lots will contain some of the best-selling stock available from Amazon, meaning your turnover will be quicker, but with less profit potential overall.
Clothing is a huge sector for Amazon, and the high rates of clothing returns means there is no shortage of clothing in very good condition, most of it poly-bagged and ready for resale. Many buyers of clothing truckloads will obtain the product to resell overseas, where demand for American clothing is popular. Each of the 26 pallets in these lots can contain up to 1200 items or more of clothing. Lucky buyers will also find a lot of designer clothing, and accessories such as handbags, scarves, belts and more. Clothing lots are generally mixed between items for clothing for men, women, and children, though some lots will also contain baby items.
Once you’ve purchased and received a pallet of Amazon returns, you’ll want to maximize your potential profits by upscaling as much of the pallet’s contents as you possibly can. As discussed, Amazon returns pallets are typically untested, meaning the merchandise each pallet contains will be in a variety of conditions. Some of the merchandise will be retail-ready, while some of it may need some repairs.
The Top 25 Physical Products Bought on Amazon Prime Day 2019Source: Business Insider, October 2020.
To increase your chances of squeezing as much profit from each Amazon return pallet purchase, there are several things you can do:
First of all, you’ll need to sort through your pallet to see exactly what you have. You’ll need to separate out what can be sold straight out of the box, and what needs your attention. Some items are more attractive to customers if sold together as a bundle. So you need to check what items make sense together as a bundle.
Many items are returned to retailers because they are faulty (this particularly applies to electronics). Try to repair and refurbish as much of this type of merchandise as you can, either doing the work yourself or using a third party. Often, faults can be minor and easy to fix, and doing so brings products back up to factory specifications and adds considerable value.
In pallets containing several faulty items of the same model, components can be taken from one model and used in another to bring that model up to spec. It’s always a good idea to keep hold of broken products that cannot be repaired or refurbished as they can often be used for spares and repairs.
Sometimes, products are returned because they are missing accessories such as chargers or headphones. These are usually easily and cheaply replaceable, and selling a product with its full list of accessories adds value to the product.
If the packaging that a product comes in is damaged, try to get hold of replacement original packaging or repackage the product. Believe it or not, poor packaging can affect the value of the product, so make sure your products are always packaged in either good quality original packaging or pristine plain packaging.
Make sure to inspect all your products thoroughly. When you resell your items, make sure you sell them advertised at the correct grade. Most of the items you sell will fit into the following categories:
Here is a list of the pros and cons of buying Amazon Returns Pallets:
Pros:
Cons:
Research is crucial if you want to be successful in this business. Reputable liquidation companies offer certain benefits to their buyers. The story of only scrap being sold through liquidation companies comes from customers who jumped at the first opportunity to buy cheap merchandise, without doing any research on the seller, the merchandise or anything else beforehand. This is a cardinal sin in the liquidation business and should never be done. Always do your research.
Choosing to buy Amazon return pallets from a reputable seller like Direct Liquidation means half of your job is already done. Nonetheless, you should always look for the manifest of whatever lot you are interested in. For most lots, Direct Liquidation provides manifests, a list containing all the relevant information about the merchandise contained in a pallet, such as its condition.
Direct Liquidation generates all the manifests it provides on its online liquidation marketplace using proprietary software to ensure each manifest accurately describes what is contained within each pallet.
Where available, the manifests Direct Liquidation provides to its business customers contain valuable information that will help you choose the merchandise you need as well as plan how to sell it. Depending on your target market and your customer base, you will be able to determine what products you are getting, even in a pallet of returned merchandise. Whether you decide to buy unsorted customer returns, that are at the lowest price point, or closeouts and overstock merchandise that have the highest resale value, but also cost a bit more, depends only on your personal preference and business needs.
Buying Amazon return pallets from Direct Liquidation is a great way to purchase merchandise at prices well below typical retail values, setting yourself up for a chance to profit when you sell. Just make sure you do your research, find the right market and the right products to resell and don’t get into bidding wars and you’ll make out fine.
Amazon return pallets are bulk quantities of returned items sold by Amazon. These pallets often contain a variety of products, including electronics, home goods, and apparel.
2. Why Are Amazon Return Pallets Popular Among Resellers?They offer a cost-effective way to acquire a large volume of merchandise, which can then be resold for a profit. The diversity of products in these pallets can appeal to a wide range of customers.
3. How Can I Purchase Amazon Return Pallets?Amazon return pallets can be purchased through liquidation companies or online platforms that specialize in selling returned and overstock merchandise.
4. What Should I Consider Before Buying an Amazon Return Pallet?Consider the type of products in the pallet, potential demand, your ability to inspect, repair, or refurbish items, and the total cost including shipping and handling.
5. Are All Items in Amazon Return Pallets in Good Condition?The condition of items can vary. Some may be like new, while others might be damaged or in need of repair. It’s important to understand the risk of receiving some non-sellable items.
6. Is It Profitable to Resell Items from Amazon Return Pallets?It can be profitable if you effectively manage the costs and resell the items at a good margin. However, success depends on your ability to refurbish, market, and sell these items.
7. How Do I Handle Damaged Items in an Amazon Return Pallet?Damaged items can sometimes be repaired or refurbished. Alternatively, they can be used for parts or sold as-is at a discounted price.
8. Can I Choose the Products in My Amazon Return Pallet?Typically, you cannot choose specific products. Pallets are pre-packed with a variety of returned items.
9. What Are the Risks of Buying Amazon Return Pallets?Risks include receiving damaged or unsellable items, underestimating repair or refurbishment costs, and misjudging market demand for the items.
10. How Do I Maximize Profits from Reselling Amazon Return Pallets?Maximize profits by thoroughly inspecting and appropriately pricing each item, repairing/refurbishing when feasible, and targeting the right market for resale.
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