Should I Buy Amazon Liquidation Pallets?
How could Amazon liquidation customer returns help your business? What are they, how can you buy them, and are they worth it?
The following article will look into the pros and cons of dealing with Amazon liquidation merchandise. While buying this merchandise can be a bargain and you may find some hidden gems, there are potential pitfalls you need to be aware of and prepare for to maximise your chances of making a profit.
In short, you will find that:
- Online sales are growing and are becoming a major channel to buy and sell anything.
- Customer returns are a great opportunity for online sellers to make a profit
- With the throughput Amazon has, the portion of returns is a significant figure, meaning you are not running the risk of being out of stock.
- Customer returns come at a cheaper price point; however, the purchase channels are different to brand new merchandise
- Wholesale suppliers provide brand new merchandise in bulk; Direct Liquidation deals with customer returns and other liquidated stock.
- Customer returns come in all sorts of conditions, using it to your advantage can create opportunities for profit.
- Sourcing merchandise from the nearest distribution centers keeps purchase costs lower, boosting your potential profit margin.
There is no doubt that shopping online is a growing trend these days. Proof of this is the impressive figure of around $601.75 billion that the online sales industry handles, according to the U.S. Department of Commerce, and sellers compete more and more every day for a share of this lucrative market. Online platforms such as eBay or Amazon are often the best place to look for a product, and more and more retailers are opening their online stores on these platforms to gain access to a larger and more global audience.
However, as the market develops rapidly, you may notice that staying afloat, let alone staying competitive in any market, is becoming more of a struggle. You are using the traditional supply channels, sourcing brand new merchandise through wholesale suppliers. But the prices on these ecommerce platforms are bordering wholesale prices and the profit margins are edging ever thinner. In essence, changing the way you source your merchandise can help you not only make more profits but also bring your business to a new level.
You may have read, while you were looking for information on how to improve your online resale business about Amazon customer returns. So why are you finding more resellers talking about this, and how could it boost your business? Here are some notes on why it’s worth taking a look at Amazon customer returns.
What are Amazon Returns?
First, we need to explain what Amazon liquidation returns are. As the great e-commerce and retail platform that it is, Amazon sells over 4000 items per day in the U.S. alone. With this volume of sales, a considerable portion of this merchandise will inevitably be returned.
Industry-standard figures put these returns at about 30% of all items sold online.
Products are returned for various reasons: sometimes, the product is defective or has superficial damage, or sometimes the customer simply wants to return the item unopened and unused. According to statistics, customers in the U.S. returned about $351 billion worth of items in 2018, and this amount is projected to reach $500 billion by 2020.
To be more precise, only 20 percent of products are returned due to damage while 22 percent were returned because they looked different from what the customers ordered.
It is not unusual for buyers to change their minds when buying an item before it is even delivered and simply return it unopened, in brand new condition. It is also common for some buyers to use the 30-day money-back guarantee offered by Amazon and simply use the product, package it, and ship it back before the guarantee period expires. This is either for a full refund or exchange of a new item.
Whatever the reasons customers have for returning these items to retailers, the result is the same. Amazon is left with lots of products, often products that are basically as good as new. Even these products Amazon may be reluctant to resell as new without extensive testing.
On top of that, all these products end up taking up space in their distribution centers, and that is the space that could be used to house new merchandise.
This means that retailers like Amazon need to resell customer returns as soon as possible to free up space. But this is a process that takes time and money if done in-house.
Where Can You Buy Amazon Liquidation Returns?
So, what do these retailers do with all these items? They liquidate them. But, as noted above, this is a time-consuming and costly process for retailers that have to deal with a large amount of new merchandise. This is why they work with liquidation companies, or rather sell merchandise to liquidators that can handle the volumes and take the liquidation and resale process on themselves.
Liquidation companies such as Direct Liquidation buy these items in vast quantities – as they are returned to Amazon, to then split into more manageable loads on our website. This is where small businesses and resellers such as you are able to access these Amazon liquidations at tiny fractions of their retail prices.
In fact, these customer returns are sold well below the wholesale prices, which means you are taking a step in the right direction towards securing a manageable profit margin. Direct Liquidation also has a large network of distribution centers you can take delivery from and, in certain cases, pick the merchandise up yourself. This reduces delivery costs significantly, and may even completely eliminate them in certain situations, which cuts down your total purchase costs.
And this is where your potential profits come in. Let’s look at why these Amazon liquidated goods are worth your time and interest.
Why Buy Amazon Liquidation Returns
If you have a resale business, the smartest thing to do is to buy in bulk, which will help you keep your costs down. Traditionally, many buyers go to wholesale suppliers.
But, as mentioned previously, wholesale suppliers deal with brand new merchandise, acting as distributors for manufacturers. There is of course a significant markup that they put on all the products they sell. While there is a way of keeping your purchase cost down, you are still working with a very slim profit margin, and in the ecommerce space, that margin is almost non-existent.
But is there another way? Sure there is! Buying through an online liquidation marketplace allows you to buy pallets, and even truckloads of Amazon returns online at low prices. Ultimately you will be buying merchandise that has been purchased directly from the retailer, split into manageable volumes and then sold to you at wholesale prices.
While you probably associate liquidated merchandise with “junk,” this is not necessarily correct. As a large retailer with a reputation to preserve, Amazon seeks to provide its customers with the right service and merchandise. This means that often even stock with no functional issues at all are liquidated once returned. This allows for a quick hassle-free turnover of this merchandise, allowing Amazon still to recover some money from it, with less logistical headaches.
Amazon works with top-tier liquidators such as Direct Liquidation, an online liquidation platform that allows businesses like yours to then buy these Amazon liquidations.
So why buy Amazon liquidation merchandise? Simple: price and potential profit margin. It can’t be stressed enough how much potential there is in dealing with this kind of merchandise and how you could increase your chances of taking your business to a whole new level.
What Conditions are the Items In?
The Amazon stock you find on Direct Liquidation is mostly comprised of untouched customer returns. Products are returned for a variety of reasons, and many are still as-new. They could have been sent to customers incorrectly, or be the wrong color or size. Sometimes products are returned within the free returns period after a customer changes their mind. Only a minority of items returned by customers are damaged, which is why these bulk pallets bought for a low price, can be real goldmines.
A large number of these items will be sold “as is,” that is, as unchecked goods that have been shipped direct from the retailer. But it is worth mentioning that even if you find damaged items, you can use parts from different units to repair them yourself.
It is not uncommon for buyers to buy these untested customer returns as they come at a lower price point. Some of these lots can contain merchandise that is fully functioning condition. You might even find an item that costs more than what you paid for the lot.
These are, it has to be said, the best-case scenarios. But, if you are handy with a tool kit, especially in the case of electronic devices, you can fix and match working parts together within a lot, and then sell other items as scrap or for spare parts.
There is also another way, granted at a higher price point: buy overstock or closeout items. These are not customer returns but rather items that have been pulled off the shelves before being sold, or items that remained in the warehouse never even getting to the store. These are essentially brand new items you can buy though Direct Liquidation.
Both are sold because models replacing them have been introduced to the market or these are seasonal products (in the case of closeout sales), or are a result of a miscalculated order (in the case of overstock). It is not unusual for market conditions to change or managers to make a wrong decision when evaluating the market demand, and order in more than what is needed, leaving them stranded with unsold merchandise that is taking up space in the warehouse. In both cases, you can get brand-name products at prices below wholesale.
Getting brand-name products at good prices will improve your competitiveness in the online resale market and increase your chances of getting the highest possible profit margin.
Each pallet of sorted merchandise comes with its manifest, which is essentially a packing list, showing the type, quantity, and quality of goods contained in each pallet. If you are looking for a specific product, this is how you find it: by reading the manifests.
Amazon liquidation returns purchased at Direct Liquidation are sold for a fraction of their wholesale value. This means that you will be able to offer the kinds of prices and set reserves in your inventory that your competitors simply cannot match. This will increase the likelihood of selling your products and keep customers coming back.
Eric works as a sales representative for Direct Liquidation helping businesses to source liquidation inventory from the world’s top retailers and manufacturers. Eric works with single pallet, LTL and truckload buyers hand in hand to ensure their businesses stay stocked up with the highest quality merchandise year round.
View Eric’s bio on YouTube.
- Truckload – 26 Pallets – 1212 Pcs – Hardware, Lighting & Light Fixtures, Accessories, Curtains & Window Coverings – Customer Returns – Craftsman, Allen & Roth, Levolor, Portfolio
USD $6,026.94 Buy NowEnds
USD $5,479.04Bid Now
- USD $53,403.02 MSRP
Untested Customer ReturnsQty: 1212Truckload (7137.73)Ships from: Whitestown, IN