Buying customer returned merchandise to resell online has become a popular way of earning some extra cash on the side. Some people are even taking it a step further and making this their primary source of income. The appeal of such a business is obvious as it follows the simple rule of buying low and selling high. This merchandise comes cheap if you know where to buy customer return pallets, as more often than not, it is sold ‘as is’ and some products may not be working.
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As you may already know, the United States of America has a large number of wholesalers and liquidation companies dealing with such merchandise, but what are your options if you live in Canada?
But, to look more into the subject of purchasing cheap wholesale merchandise or customer returns (which can be often labeled as unsorted customer return, a type of merchandise that is sold at the lowest price point and can sometimes contain a number of the most profitable wholesale items), we have to look at what customer returns are, what happens to returned items, and how to get your hands on them. In short, we have to find out how buying return pallets through the right source can boost your profits.
Put yourself in the position of a buyer. If you are buying merchandise in a brick and mortar shop, you probably have opportunities to test a product. After a few days, you might not like what you bought and for that simple reason you can head back to the store and return the product. The process is the same with purchases made online, only now you have even more limitations to testing the product. If it is clothing, you can only try it once it is delivered, if the fit is not right, you can return it.
Now these are some of the reasons, but in reality products get returned for many more: maybe the seller shipped the wrong size or color of the product, or it isn’t as described in the listing. Maybe the buyer changed his or her mind as the product was on its way, or there was an accident during the shipping process that damaged the product.
Whatever the case may be, these are all reasons why people return products. Now, some may be slightly used, some might be returned unopened and are basically new, some might have just been tried on and returned right away. In any case, the stores can’t put these products back on sale as new and have to label them as customer returns, and sell them at significant discounts. Retailers might organize closeout sales or simply offer these products by the pallet to wholesale buyers.
Another option is to liquidate the merchandise using a liquidation business as a platform. Walmart liquidations is a perfect example of a large retailer using reputable liquidation companies to reach a wider online audience and sell the merchandise directly. This has a number of effects: you eliminate the middleman in the process (the wholesalers), keep the price below wholesale and get a chance to boost your profit margin on resale.
This can be down to personal preference and your research skills. The rule of thumb is to purchase from reputable sources. We have already noted that liquidation companies will offer you a better chance of boosting your profit margin than wholesale suppliers. However, you also have to know that a large portion of liquidated stock is sold ‘as is’, because it is either in the unsorted customer returns category, or it has been tested but is not working, meaning you may find products of various conditions. This raises the question of quality, and also provides you the reason to do thorough research into your potential sources.
There are numerous liquidation companies in Canada that deal with customer returns, but you have to look for one that has been praised by its customers and that has built a reputation as a reliable source.
But how exactly is that to your benefit if the company is selling unsorted customer returns, or tested products that are not working, like electronic gadgets?
There are several answers to that question. First, as we mentioned, retail players like Walmart will provide you with higher-quality merchandise through a liquidation platform. This alone should give you a much better chance of acquiring quality merchandise. A brand like Walmart would only work with top-tier companies, as it has its own reputation to look after.
Now, on the other hand, the liquidation companies also have their own reputation to look after. Often they will sign exclusive contracts with retailers and manufacturers to set a certain standard for the products that can be listed at their liquidation website. As a bonus, you are given the manifest for those unsorted customer returns or the non-functioning products. This is your litmus test of a liquidator’s quality. Reputable liquidators will provide you with a manifest, which is essentially a list showing you the type, the quality and the quantity of merchandise within a pallet, without you even having to ask. If your source withholds any information, or even worse, declines to provide you with any details about the merchandise, you are buying in the wrong place.
Now, you can always stay away from that sort of merchandise and look to buy pallets of electronics that have been returned by the customers and refurbished either by the manufacturer or the liquidator. The advantage of this type of merchandise is the fact that the products have been refurbished, or brought back to the original condition, and are as new. Liquidators will also refurbish these products themselves and slap a 90-day warranty on such products. This means that finding quality items should not be an issue if you know where to buy and what you are buying.
You may even be able to cut costs down further if you are able to go to the warehouse and pick the merchandise up yourself. In any case, you are sourcing merchandise at prices below wholesale. If you buy smart, you should have the upper hand in any market, especially now that prices of single units on ecommerce platforms like Amazon are nearing wholesale.
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Kersten works as a sales representative for Direct Liquidation helping businesses to source liquidation inventory from the world’s top retailers and manufacturers. Kersten 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.
Schedule a sales callback with Kersten right now and find out how he can help your business profit with liquidation merchandise.
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