How to Start a Small Business Reselling Walmart Customer Returns

The idea of being your own boss has been playing in your head for a while but you are not sure of the steps needed nor are you sure what sort of market to enter. Buying and reselling might be the business for you, especially since online sales don’t stop when the lights go out. But you need stock, you need to find the source, and there is a bunch of other things you have to sort out.

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For a successful retail business, you need to provide quality merchandise and service to your potential customers while sourcing merchandise at low prices. Buying Walmart merchandise is one way to provide quality. But how do you buy it at prices that would allow you to stay competitive in an online marketplace? Here are a few tips on how to start your business on the right path.

Legal Considerations of Starting Your Business

Depending on the state you live in, there are certain regulations you have to follow. Of course, you have to register your business but make sure you are informed of the legal structures available, what they are and which one suits the scale of the business you intend on running. Whether you will be a sole proprietor or plan on starting a corporation depends only on your requirements.

With the legal structure, you have to make sure you understand what is probably the most essential part of the legal framework: your tax obligations. For precise information, contact your state tax department or the office of the secretary of state. If you are not sure you can handle the process yourself, consider hiring an attorney or look for agencies that provide these services.

Understanding the Market

Now that you are done with the regulatory obligations and you have registered your business, it is time to turn your focus on developing the business itself. You have already hatched a plan and decided you will do online resale, a small business you can run from your own home. This business does not require you to be present in a physical store the whole day because the orders come in at any time of the day and you are shipping the products at your own pace during the day, usually a bunch of orders at once.

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But to have the best chance of making it in the resale business, you have to look into the market and understand its dynamics, the supply, and the demand. Your main focus points should be products you are comfortable with; this is your starting point. Check whether the products you favor are in demand or if the market is saturated and if the competition is fierce. Entering such a market could be the wrong decision, especially if you have no experience in running your own business.

It is advisable to look for smaller, niche markets that might be undersupplied if you are a beginner. This is because the demand for a certain product is higher than the supply. For you, this would mean that the competition isn’t as fierce as in some other markets, and it also means there is not much downward pressure on the prices.

Additionally, you can use the experience later when you decide to branch out. Niche markets are the perfect learning grounds for entrepreneurs who are looking to get the hang of the ins-and-outs of running their own business. Another advantage is that, if you manage to provide quality service, paired with the quality merchandise, you will build your reputation along with the customer base that will follow you into any market you decide to conquer next.

Why Walmart Customer Returns?

When thinking of quality merchandise, you immediately look at high-end brands and quickly realize that these might be out of reach price-wise. When you factor in the purchase price and the delivery costs, your profit margin is slim or even zero.

This is where Walmart customer returns come in. Retailers such as Walmart have a huge throughput of merchandise, in their physical stores and online. This means that a certain percentage, close to 30 percent, of these products, will be returned to the retailers. Why? Some of them, ordered online, might have been damaged during transport and the buyer returned it, even though it might just be a damaged packaging. Some are returned due to a malfunction, and some are perfectly fine but get returned anyway because maybe the retailer shipped the wrong color, or the size or the buyer simply expected the product to be different that what it is. On the other hand, you have people who use the generous money-back guarantee and return policies to try out the merchandise and return it within a certain period.

Now, all this merchandise, irrespective of its condition, can’t be resold through regular channels. Even though the product was returned brand new, it can’t be put back on the store shelf. It has to be liquidated.

At the mention of liquidation, most people usually think of low-quality products, used merchandise, broken or even scrap items left behind a bankrupt or closed company. You would be right in some ways, and a large portion of liquidated merchandise is as described above. However, with retailers having no choice but to liquidate customer returned merchandise and with their reputation on the line, things have started to turn around.

Nowadays, many retailers have dedicated departments that deal with the customer returned merchandise, and so does Walmart. Once the product is received, it undergoes review, testing, refurbishing, repackaging and sorting before it is ready for sale again. Usually, the merchandise would be snapped up by wholesale suppliers who turn up with their trucks and get as much as they can transport. This left the “small buyers” out of the game, and the retailers realized this. What happened was basically that wholesalers would also buy liquidated merchandise, mark it up and resell it. So if you dealt with a wholesaler, chances are you had been working with liquidated customer returned merchandise already.

To avoid the wholesalers’ markup, retailers found a new avenue. Walmart, in particular, opened a storefront at a liquidation platform Direct Liquidation. This way, merchandise usually sorted in pallets or lots can get sold online to a wider audience. It gets shipped out at a fast pace leaving behind space in the warehouses for brand new stock to come in.

So how can Walmart customer returns help you run a successful business? There are several benefits. First is the obvious one, the price. You are purchasing the merchandise at prices well below wholesale. This leaves you plenty of room to adjust the prices on resale no matter what the market is you are entering.

Next is quality. Names like Walmart and Direct Liquidation, leaders in their respective fields, stand for quality. In addition to the reputation, the products, as noted above get reviewed, refurbished and repacked. This means that you can buy either brand new or as new merchandise to resell.

If you are wondering how you can verify that the merchandise you are buying is of a certain quality, you can consult the manifest. This is a packing list showing you the type, the quantity and the condition of the merchandise. It will also contain the product names and descriptions with a certain grading system that you should familiarize yourself with before making any purchases.

And the third benefit is the vast network of distribution centers that both Direct Liquidation and Walmart have. This means you can further cut the purchase price by buying merchandise from distribution centers nearest to you if you can’t pick up the merchandise yourself than at least you can cut down on the delivery costs which will further bump your profit margin.

So in essence, running a small business reselling Walmart customer returns is all about calculation, patience, and details. If you spend time on research and pay attention when you are purchasing the merchandise, especially if you follow the tips provided in this article, you are giving yourself the best chance of success. Good Luck.

Direct Liquidation is a goTRG company.

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