We’ve often heard that one man’s trash is another man’s treasure.
With Amazon Returns, one man’s returned merchandise is another man’s inventory.
Buying and then selling Amazon pallets doesn’t sound like a solid business plan, but other people have made thousands of dollars doing it.
Just because others have profited from it, however, does not guarantee it.
The key is to know everything you can about the process: Where to buy the pallets, how to find good products to flip and how to maximise your profits.
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In today’s blog post, we’ll explore how buying and flipping Amazon Returns can be a profitable exercise.
How does Amazon Returns work?
Amazon is the world’s largest online retailer.
One of the reasons they are the biggest in the world is because they do their best to make it easy for their customers to buy from their website.
One of the ways they do this is through their returns policy.
Amazon’s return policy is mild.
For most items, Amazon allows customers to return orders within 30 days of receipt, regardless of whether the item is damaged, defective or for whatever reason.
The thing is, although many of these products are returned unopened and presumably in the same condition as when they were shipped, Amazon sellers can’t sell these unopened products back as brand new.
So what happens to all those returns that Amazon willingly accepts?
Some of the returned items end up in Amazon Warehouse, where they are sold at a discount.
The items that end up in Amazon Warehouse are usually those with packages that have been opened or even damaged, and the products have been used but are still in good condition.
Amazon liquidates the rest of the returned inventory to small business buyers through its own online liquidation market in the US as well as a European liquidation market.
Business buyers go to these sites looking for liquidation, lots of returns and excess inventory in various sizes and parts.
These lots may have been casually sorted by product category.
For example, home decor, kitchen equipment, clothing.
But this is not very strict.
A liquidation lot labelled “home decor” may very well contain random clothing, toys or beauty products.
What’s more, these lots are sold via auction, similar to eBay.
That is, buyers can name their price and the highest bidder wins the lot.
Since Amazon only sells these liquidation lots to businesses like individuals, you will instead buy from what is called a third-party wholesaler or liquidator.
They buy the liquidation lots in bulk from Amazon and then sell them at a profit to smaller businesses and individuals.
Advantages and disadvantages of flipping Amazon Returns
Much lower cost per item than buying retail or even wholesale
Can attract more buyers by selling items at competitive prices
Can select specific pallets that contain specific product categories
Requires research to find the right liquidator
The quality of items on a pallet is hit or miss
Can be more expensive with freight costs
Where to buy Amazon returns
Here are some reputable places to buy Amazon returns pallets.
Liquidation.com | Amazon Liquidations
Liquidation.com is probably the largest liquidation company on the internet and works with over 11,000 retailers in addition to Amazon.
Similar to eBay, they auction off pallets based on a starting bid.
They source their Amazon pallets from customer returns from Amazon as well as through Amazon Liquidations.
Not all pallets they offer display photos, especially those from Amazon Liquidations from fulfilment centres, which are usually sealed.
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Liquidation.com provides a list of the contents of each open pallet as sourced from customer returns.
Retail prices are also included in the list.
They give you the location of the warehouse they ship from, but you can’t physically pick them up.
You can let them handle the shipping or find your own shipping service.
Direct Liquidation | Amazon Liquidations
Direct Liquidation offers many Amazon palettes and also works with other major retailers like Walmart, Target, Lowes and other retailers.
Similar to eBay, there is no set price for a pallet.
There is a starting bid based on a percentage of the estimated selling price of all pallet contents, and you can compete with other bidders to get the pallet.
Direct Liquidation also displays photos of the pallet to give you an idea of the condition of the contents.
You also get a list of the contents inside and the estimated sale value.
They also provide the storage location so you know if the trip is away from you, or at least you can estimate how much the freight would cost to send a pallet to you.
BULQ is another reputable liquidation company that offers pallets at a fixed price.
They even have a measurement for what a pallet is: 48x40x42.
They also sell smaller units, called cases, which measure 24x20x23.
BULQ works with many different retailers, but the website does not have a specific section with pallets sourced from Amazon.
Therefore, you need to search for “Amazon” in the search box to see these pallets.
The prices for the pallets are fixed.
The shipping cost per pallet is also fixed at 200 USD, regardless of where the pallets are delivered from.
The pallets are sorted by category and the contents of each box are checked for quality, which is listed in the pallet description.
BULQ clearly displays the quality of the items on the pallet on the pallet page, as well as a detailed list of the items contained within and the retail price for each item.
They even guarantee 98% accuracy and above for this list or refund the price difference.
TDW Closeouts offers pallets from various department stores and online retailers, but of the other companies here, they are the most secretive.
They offer the pallets online, but you can’t order from the website.
You have to call them and find out what pallets they have available, how much they are and how they can be delivered to you wherever you are in the world.
It looks like it’s more geared towards medium to large companies, not just in the US, but worldwide.
They will ship to different countries.
But if you’re from Florida, specifically in the Fort Lauderdale area, you’re in luck: you can visit the 35,000-square-foot warehouse and buy directly from them.
They also give you better prices if you buy direct.
Things to consider when buying Amazon Return pallets.
Flipping Amazon return pallets is a relatively new trend.
Here is some advice to help you make as much money as possible.
Buy just one or two pallets from a liquidator at first.
You want to experience first-hand what a particular liquidator’s pallets are like.
Not to say that all liquidators are trustworthy, but buying a liquidation property is already a big risk, and you don’t want to add more risk by going blind.
Manage your expectations of the condition of the items.
The items in the box are not all brand new in their original packaging.
At the very least, the packaging will be damaged if there is any original packaging at all.
The conditions of the items range from slightly used to almost worn.
Buying liquidation property is a numbers game.
If you buy a lot, you are essentially betting that at least some of the items will still be in saleable condition.
Don’t get discouraged if you’re halfway through your pallet and all the junk.
In his business, it’s typical to throw away a third to half of everything.
Electronics involve a larger investment.
Keep in mind when buying an electronics lot, you are signing up for a huge time investment.
First, you need to test each of them to see if they work.
Once you have sorted the ones that work and the ones that don’t, you need to check if there is a market for defective units of these electronics.
If you manage to find a market for these broken units, you can at least sell them.
Otherwise, you would then have to find a market for its parts.
It is a lot of time to invest in items that you don’t even know if people will buy.
Understand freight costs.
Pallets can weigh hundreds of pounds depending on the item, which means shipping the pallet will cost a few times more than the cost of the pallet of returned goods.
Focus your search on companies that are accessible by car to minimise your costs.
Sell your inventory as soon as possible.
When you sell an item, it seems like the logical pricing strategy is to get as much profit for it as possible, so you tend to price it higher.
However, if you are working with pallets of Amazon returns, it makes more sense to sell them More of your inventory, even if it is for a lower price than you wanted, than to squeeze every dollar you can out of a single item.
This strategy makes sense if you are dealing with a lot of inventory.
The more units you can sell, the more profit you make on all the units you sell.
Only invest what you can afford to lose.
The most important thing to remember is that buying Amazon returns is NOT a guaranteed way to make money.
And because there is a lot of risk involved, I would absolutely not recommend investing all your savings in this venture.
Bottom line: is buying Amazon Returns worth it?
Buying Amazon Returns is an interesting side opportunity that will only increase as online retail grows.
If you find the right places to buy Amazon returns pallets, and if you buy the right pallet, you stand a great chance of being successful.
Here are some other ways to make money with Amazon.
Or if you want to start a profitable business from home, here are some options.
Have you ever bought a range of Amazon returns or returns from other retailers? Share your experiences in the comments below!