In the modern world of online retailing, Amazon stands head and shoulders above the competition. As a result, they have to deal with an incredible amount of returned products.
A lucrative side industry in selling Amazon returns has sprung up as a result. Whole pallets of products can be bought, and this can be a highly profitable business if you know what you are doing. However, it can also go horribly wrong if you don’t learn the ropes first.
That’s what I will address in this article. I’ll look out how to buy amazon returns successfully, including where you can buy pallets, finding the best products for resale, and how to maximize profits.
Contents
What Happens To Amazon Returns?
One of the main reasons Amazon became the largest online retailer in the world is because it led the way in simplifying the whole online shopping experience. Part of their success is certainly down to their remarkably relaxed returns policy.
Customers feel safe buying from Amazon as they can return almost everything they buy within 30 days of receiving it. This is regardless of the reason. Whether it’s damaged, you bought the wrong item, or you just don’t like it, they’ll accept the return with a full refund as long as it falls within that period.
Ever heard of Amazon warehouse?
As a result, a staggering 30% of all Amazon sales are returned to the company, many of which haven’t even been opened. However, sellers on Amazon cannot resell these products as brand new, even if they are undamaged or, in many cases, not even opened. So what ends up happening to all these returned goods?
A small portion of returns are sold directly through a section of their website called Amazon Warehouse Deals at a discounted price. These are generally products where the packaging has been opened or damaged, and the items have had minor use but are still in good enough condition to be resold.
The highest lot bid wins…
The remaining inventory is liquidated by selling large lots of similar products. This is done through an auction process where the highest bid wins.
The lots are sorted into different product categories, for example, home goods, apparel, footwear, etc. However, these aren’t always held to the strictest standards, and you’d be surprised at some of the different products that end up in the same lots.
Third-party wholesalers…
Unfortunately, these sales are limited to third-party wholesalers or liquidators who will then look to make a profit by selling the lots to individual buyers and small businesses. This is where you come in and, with a little guile and practice, can make further profits from reselling the individual items.
Reselling Amazon Returns
Pros
- You can get a far lower per-unit cost. Even lower than when buying wholesale.
- You can attractively price your purchases to get more buyers.
- You can buy certain pallets of products that you know will have good resale potential.
Cons
- You’ll need to do your research on the different liquidators. Some are far more reputable than others.
- The quality standards in individual pallets can be quite variable.
- Shipping costs will have to be taken into consideration.
Reputable Liquidators That Sell Amazon Returns
All of these third-party wholesalers are reputable sellers of Amazon returns.
Liquidation.com
This company is the largest third-party wholesaler on the internet, and they work with countless other retailers as well as Amazon. Their Amazon pallets are all customer returns sourced from Amazon Liquidations directly. Their pallets are auctioned off to the highest bidder.
Annoyingly, actual photos of the pallet contents are not always included, but a full list of the pallet contents and stock photos are. The retail price information is included, as is information on the highest bid so far.
You can’t pick up in person…
While they will let you know the warehouse location that the pallet will be shipped from, you can’t go pick it up yourself. You can choose to either let Liquidation.com handle the shipping or arrange it yourself if you can find a cheaper shipping company.
Direct Liquidation.com
Much like Liquidation.com, Direct Liquidation deals with all the biggest retailers, including Amazon returns. Once again, it’s an auction-based system with the price starting at a very low percentage of the overall retail price. Photos are provided for the contents of each pallet, and a full manifest of what’s inside is included, along with the general condition of each product. Estimated retail values are also provided.
They will either ship to you directly, or you can arrange a cheaper option or even pick the pallet up yourself if you live nearby.
BULQ.com
BULQ also offers pallets of Amazon returns, but rather than auctioning the lots, they advertise them at a fixed price. They also offer smaller lots called cases that they ship at a far lower price. As the website deals with a range of different retailers but doesn’t have a specific section for Amazon sourced products. You’ll have to manually search for them using the search box.
Anyone can browse lots on BULQ, but they will require you to register if you want to purchase. You’ll also need to have a resale certificate to buy from them.
A 98% accurate manifest…
Each pallet is separated by category, and a detailed manifest lists all the contents and describes the condition of each product. Retail value is also prominently listed. BULQ guarantee that their manifest list will be a minimum of 98% accurate and will refund the difference if they fall below that target.
How To Buy Amazon Returns – The Important Considerations
As a way to make money, reselling Amazon return pallets hasn’t been around for very long. To aid you in your quest for profit, here are a few pieces of good advice.
Don’t overbuy initially
When starting, you’ll want to get a feel for which liquidators are the most trustworthy and honest with their descriptions. Therefore, you’ll want to start by purchasing one or two pallets at the most. If you feel the contents were accurately described, you can make a larger order next time.
Don’t set your expectations too high
If you’re expecting everything in the pallet to be brand new and in its original packaging, you’re going to be sorely disappointed. A lot of the items will have been repackaged, and there will likely be cosmetic flaws on a large number of them.
Buying returned lots is a risky business, especially if you’re purchasing uninspected pallets. You’re gambling that there will be a certain percentage of good, resalable products. To be brutally honest, a large proportion of the stock you’ll buy will end up in the dustbin. Hopefully, no more than a third if you play your cards right. That’s just the nature of the game.
Electronics are an expensive and time-consuming investment
Every piece of electronic equipment you buy will have to be individually tested to see if it works properly. This takes much longer than you’d imagine. Once you’ve established that, you’ll then have to spend time trying to find a market for the broken ones, if that exists.
Failing that, you might be able to sell individual parts if you’re lucky. They are also some of the more expensive lots you can buy, exposing you to increased financial risk if there are too many faulty items.
Factor in shipping costs
Depending on the products, pallets can be extremely heavy. In some scenarios, you may end up spending way more on the freight costs than the cost of the pallet itself. Try to source your pallets as locally as possible to keep costs down, or alternatively, pick up the goods yourself if that’s an option.
Sell Fast. Don’t sit on your stock
Don’t overprice your inventory so that it just sits on the shelf. You don’t have to squeeze every last cent of profitability out of every item. A more sensible strategy is to take a lower profit margin and hopefully make a larger number of sales.
Losses also aren’t the end of the world. If you can recoup a portion of the cost of a product, it’s better than losing it all by not selling. Sometimes you just have to take a hit.
Don’t over-invest
You’re never guaranteed to make money when trying to flip Amazon returns, and you must always keep this in mind. Start small and only re-invest the profit that you’ve successfully made from sales. This isn’t the kind of business where you invest your life savings. It’s far too risky.
Read the manifests very carefully
As you can’t generally physically inspect the contents of a pallet, careful inspection of an auction manifest is the next best thing. Here you will find all the available information on what you’re buying, including brand, model number, and quantities. Try to stick to lots where you at least have an idea of the quality of goods you’re buying.
Ever Wondered About How Amazon Started?
Well, if you’re curious and love reading, then Amazon Unbound: Jeff Bezos and the Invention of a Global Empire is the best place to start, along with The Everything Store: Jeff Bezos and the Age of Amazon aas well as Working Backwards: Insights, Stories, and Secrets from Inside Amazon.
But that’s not all! I also found The Amazon Way: Amazon’s 14 Leadership Principles, as well as The Four – The Hidden DNA of Amazon, Apple, Facebook, and Google, which make for excellent reads on business savvy!
Plus, there are lots more ways to make some extra cash with Amazon; I highly recommend the following guides, AMAZON FBA: A Beginners Guide To Selling On Amazon, Making Money And Finding Products That Turns Into Cash, or how about how to Become an Amazon Selling Legend Using Retail Arbitrage, and lastly, Selling on Amazon For Dummies, all available online in 2023.
How To Buy Amazon Returns – Final thoughts
So now you know how to buy returns on Amazon, all you have to do now is work out a successful strategy to resell your purchases.
With a keen eye for a bargain and an outlet to sell your goods, it can make for an interesting side-gig. There are people out there that have even managed to turn pallet flipping into a full-time career.
Whatever your intention, start slow and learn the business before you dive in too deep.
And may the flip be with you!