If you think you have to deal with brand new merchandise in order to make a profit, then think again. There are many products out there in a variety of conditions and every product has its own place on the market.
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The same goes for customer returns. These are the products that have been sold and for whatever reason returned to the seller. Regardless of their condition, they can’t be sold again by the retailer and have to be sold through other channels. This is where you as a potential reseller come in to reap the rewards.
Here are a few tips that will help you understand customer returns and how they can help you turn a profit if you source them at the right place.
As noted above, customer returns are merchandise that was once sold and then returned by the buyer. There are plenty of reasons for the returns to happen, especially if the merchandise has been purchased online. It could happen that the seller shipped the wrong product, maybe the sizing was not right or maybe the buyer expected the item to look different in person. These are all the reasons for returns.
Some companies also have a generous return policy that allows the customer to return the product for a full money return within a 30-day period. While some do this because of certain issues with products or damage during transport, others simply used the 30-day period to try out and test the item and simply return it in exchange for something else.
Regardless of the condition of these products (and some can be returned in brand new condition, in original, unopened packaging), these products have to be sold through other channels. Customer returns are therefore sorted and packed into pallets for bulk sales.
Traditionally, wholesalers snap up customer returns from retailers by a truckload. When retailers sell their customer returns, they are basically liquidating merchandise. But as they aim to dispose of the merchandise quickly, the wholesalers have the upper hand due to their buying power.
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They end up sorting merchandise out, cherry picking the top items to sell individually and pack up the remainder of merchandise into pallets to sell on to other buyers for a profit. As a reseller, you are certainly aware of the channel and as a regular buyer, you probably have already created a network of wholesalers you deal with. And this is a channel that works for many.
However, in recent years, retailers have started utilizing the power of online liquidation platforms such as Direct Liquidation. This way they are able to sell their merchandise quickly by reaching a larger number of online buyers interested in smaller quantities of merchandise. The merchandise is still snapped up very fast as online sales don’t stop.
Over recent years you will see a number of top-tier retailers like Amazon, Walmart, Target or home improvement merchandise specialist Lowe’s liquidate their merchandise through Direct Liquidation, a reputable partner in the business. This not only expedites their liquidation of the merchandise but open up a door to smaller buyers, or people willing to make money reselling customer returns, secure a significantly higher profit margin. So let us look at the benefits of buying liquidated customer returns.
When you are looking to buy and resell the merchandise, the goal is to buy as low as possible in order to resell with a higher margin. When buying from a wholesaler, you have to account for a wholesaler’s markup which basically eats into your potential profit margin.
This is the advantage of buying liquidated customer returns through liquidation platforms such as Direct Liquidation. Essentially, you are eliminating a middleman, the wholesaler, by buying through a liquidation platform. You are basically purchasing pallets of merchandise directly from the retailers. This provides you with a chance to bring your business to a new level and ensure competitiveness in the market you are targeting.
The price of the items is not the only advantage. Direct Liquidation owns a network of distribution centers across the United States and Canada, making it easier to ship merchandise and to cut delivery costs if you purchase the merchandise from a distribution center near you.
In addition, merchandise liquidated by retailers is often shipped by retailers from their warehouses. This means that if you can find a distribution center close enough to go and pick the merchandise up yourself, eliminating the delivery costs altogether.
So if the price is the major point of sale for of liquidated customer returns, there must be a catch. Buying in bulk is always cheaper, but as said before, some of this merchandise is returned due to issues, used or completely broken. So is the price reduction actually the reflection of the merchandise condition?
Traditionally, at the mention of liquidated merchandise, buyers turned away thinking it could only mean used, damaged or scrap merchandise. However, as retailers built up their reputation, so did the liquidation platforms they connect with. While the majority of merchandise sold through liquidation platforms is end-of-life merchandise, there are ways of ensuring you are purchasing quality stuff.
First, if merchandise has been reviewed and rated, it will certainly be highlighted in the pallet description. Brand new, like new or refurbished merchandise of Grade A comes with a warranty and are basically top quality. Grade B or C might have slight cosmetic blemishes or visible damage, but still be functional.
Whatever the case might be, you are able to download a manifest, which is a packing list showing you the type, the quantity and the quality of the merchandise in the pallet. It will provide you the description, make and model of the item and the grade if the pallet has been reviewed. It will also show you where the pallet ships from so you can factor in the delivery costs into your final equation.
All in all, you can make money by reselling customer returns if you know where and how to buy. It can be a great second stream of income or even a full-time job if it is something you truly enjoy.
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Corey works as a sales representative for Direct Liquidation helping businesses to source liquidation inventory from the world’s top retailers and manufacturers. Corey works with single pallet, LTL and truckload buyers directly to ensure they stay in stock with high quality inventory year round.
Schedule a sales callback with Corey right now and find out how he can help your business profit with liquidation merchandise.
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