Online shopping is fast becoming a norm and Amazon, the largest online marketplace has experienced the largest influx of shoppers. However, with Amazon’s unprecedented growth comes an equal increase in the number of returns.
So, if you intend to join the Amazon marketplace, you should be prepared to get product returns from time to time. While this may not entirely be a result of the quality of your product, it directly impacts your return rate and a high return rate can potentially lead to your Amazon account being suspended.
Returns are bad for sellers in the long run, but they can also be a blessing for resellers who learn how to buy Amazon return pallets.
In this post, we’ll show you how to buy Amazon return pallets, where to buy them, and how you can make money from them. But first, let’s take a look at a few Amazon return statistics and see why customers return Amazon products.
Why do Customers Return Products on Amazon?
According to Business 2 Community, about 67% of online shoppers check the returns page before placing an order. So, it is not surprising that Amazon’s flexible return policy is one of the top reasons why people prefer to shop from there.
However, people do not shop online with the aim of returning their orders. Although some reasons for product returns are not tangible, most customers return products due to damage, defect, low quality, or in some cases, not getting what they expected.
20% of shoppers returned products because they received damaged products, 22% received a product that looked different from what was ordered, 23% received a completely wrong item, and 35% returned products for reasons best known to them.
The reasons for returns may be justifiable on the customer’s side, but too many returns can have a bad effect on Amazon sellers. Thankfully, sellers can now buy Amazon return pallets, resell them, and make their money back instead of making outright losses.
What Does Amazon Do With Product Returns?
Amazon has different methods for handling returned products, depending on the condition of the returned goods.
They typically resell products that are still in good condition and dispose of those that are damaged. However, in some cases, they liquidate. By liquidating, Amazon simply sends the returned goods to partner firms that specialize in reselling returned products. Amazon return pallets are often a means of liquidation.
In 2021, Amazon announced the launch of liquidation resale platforms to help sellers resell returned products.
There is the Grade and Resell program for FBA sellers who would like to relist and resell their returned inventory on Amazon as used products. There’s also Amazon Outlet, a program that serves as a channel for sellers to let go of overstocked merchandise. Amazon also runs a daily deals website — Woot, which also functions as a great place for sellers to resell their products.
These channels may sound great or work great even, but not all sellers would like to go through the stress of receiving returned orders, repacking, and then relisting them on Amazon. Sellers who would rather not go through this stress can instead learn how to buy Amazon return pallets or Amazon Liquidation pallets.
What are Amazon Return Pallets?
Amazon return pallets or Amazon liquidation pallets are big crates that Amazon uses for the distribution of returned goods.
Amazon organizes customer returns into different boxes and then sells them to large firms at discounted prices. These firms in turn make the goods available to resellers who are willing to take the risk.
How to Buy Amazon Return Pallets
Amazon typically creates return pallets to make liquidation fast and easy. So, they typically sell to liquidators who have the capacity to take large inventory at once. These liquidators then sell the return pallets to resellers and small businesses at an affordable price.
So, instead of going through middlemen who are likely to sell at a markup price, you can buy Amazon returns or liquidation pallets from liquidation firms. These firms purchase the return pallets at Amazon liquidation auctions.
Amazon Liquidation Auctions
Liquidation companies purchase the return pallets from Amazon based on bids. Registered liquidation companies can simply place bids and get a truckload of overstocked inventory and returned goods. The Amazon liquidation auction is a great move for large business buyers who want a wide range of inventory to start.
The only clause is that Amazon does not disclose the content of the pallets and these companies also do not disclose the content of the pallets to resellers.
What Should You Expect in an Amazon Return Pallet?
The content of a return pallet is largely unpredictable. The pallets typically contain a mix of products from different categories. So, you may have electronics, clothing, beauty products, video games, and others in one pallet.
Some liquidation websites provide a few pictures, which are typically not very helpful because you cannot see the entire pallet. However, some liquidation websites publish a manifest consisting of a number of pages that lists every item in the pallet, so you can see all the items it contains there.
The only downside to buying Amazon returns is that not all the products will be in great condition. Some may be unfit for sale, others may be great to sell, and some may require you to fix them or do some touching up before reselling.
Should You Buy Amazon Returns or Liquidation Pallets?
Before you decide to buy Amazon returns, be sure to weigh your options. While buying Amazon pallets may be a good move for you if you intend to start a retail arbitrage business, you should still be careful else you may end up losing more money than you bargained for.
Yes, you get to purchase a wide range of products at a hugely discounted price, but if the majority of them are unsellable, you may end up making a loss. So, even though buying Amazon pallets comes with benefits, it also comes with downsides that must not be ignored.
A few benefits and drawbacks of buying return pallets are listed below:
- You can purchase in small quantities and spend less
Buying Amazon return pallets is a great way to cut down on starting capital for your reselling business. You get to purchase a good amount of inventory at a discounted price.
- You don’t need to have a large warehouse
Since you will be buying products in bits, you won’t be needing much storage and that’s a win since you also get to save on storage costs.
- You can skip the middlemen phase
Buying return pallets saves you more money compared to when you buy from wholesalers or middlemen who sell at a markup price.
- You will not get a good description of what is inside the pallet. This may be quite risky especially if you would rather focus on selling in one category.
- You may end up with unsellable inventory if you get damaged goods.
- This business model is quite unsustainable and may not work for you in the long run if you plan to expand your Amazon business.
Where to Buy Amazon Return Pallets
You can purchase Amazon return pallets from liquidation companies. There are many liquidation companies to choose from, but you have to be sure you’re buying from reliable firms. Here are some liquidation companies to buy Amazon returns from.
Liquidation.com is one of the largest and most reliable liquidation companies. Most resellers who buy Amazon returns often check on this website first.
Liquidation.com sells Amazon return pallets via auctions, so you have to register and place bids. However, like most liquidation companies, Liquidation.com does not provide any details about the content of the return pallets, so retailers will have to find out themselves after purchase.
Direct Liquidation is quite similar to liquidation.com, both websites partner with large retailers like Amazon, Target, and Walmart. So, you’re sure to get great deals on this website.
Direct liquidation.com allows you to narrow down your search based on the marketplace. If you only want to buy customer returns from Amazon, you can search and only view pallet options from Amazon.
Like liquidation.com, this website only sells pallets based on auction so you have to sign up and place bids to secure a pallet you are interested in.
Direct liquidation also does not give detailed descriptions about the content of their pallets, but they sometimes attach images. Try not to bank on the images though, because they usually don’t give a correct impression of the content of the pallet.
888Lots.com is not as popular as the ones listed above. They purchase most of their pallets from Amazon, and the nice thing about buying Amazon returns from 888lots.com is that you can buy individual products at hugely discounted prices.
They also provide a manifest; a detailed description of the content of their pallets as well as an Amazon calculator to help you estimate your costs and decide if the pallet is a good buy.
While you may be able to buy individual products at ridiculously low prices, you may not always get perfectly good deals because sometimes the goods may be damaged.
For US consumers, 888 Lots requires a current resale certificate. You must present a valid business registration document if you’re based outside the U.S.
Related: How to use Amazon FBA Calculator
Bulq is another popular liquidation website, they also purchase customer returns in bulk from different online marketplaces, not just Amazon.
Unlike the majority of other liquidation companies, Bulq does not sell through auctions. All you have to do is add to the cart and make payment once you see a pallet you are interested in.
They provide a detailed description and pictures of your pallet, but still, you cannot be completely sure of the content of your pallet and the quality of the products.
Bluelots is another popular liquidation company that makes it easy for resellers to buy Amazon returns or customer returns from other marketplaces.
Since they often have a mix of pallets from different marketplaces, they have a search feature that allows you to find pallets from any marketplace you want.
BlueLots provides you with a wealth of return-pallet information, making it easy for you to make a well-informed choice. You can view detailed manifests and clear photos to get an idea of the content of the pallet.
How Much Does it Cost to Buy Amazon Return Pallets?
The cost of an Amazon liquidation pallet will vary depending on the size of the pallet and the liquidation website you want to buy from. Some liquidation websites have fixed rates, while others have liquidation auctions and sell based on bids.
Averagely, the rates per pallet might range from $100 to $5,000, depending on the quality and the worth of the commodities. However, this price range does not apply to all pallets or websites, as some pallets can cost up to $10,000.
Liquidation companies also have different shipping costs although some offer free shipping. Usually, you will have to bear the shipping costs which are determined based on the size of your shipment and the distance of the shipping destination.
Related: Ways to make money on Amazon
Tips for Buying Amazon Return Pallets
Before deciding to buy Amazon returns, make your findings and be armed with enough information to ensure you make your money back. Now that you have a list of places to buy return pallets from, we’ll help with a few tips to help you buy valuable return pallets.
Get More Information About the Liquidation Company
Don’t go right into sourcing return pallets from just any website, take out time to find out more about the companies. Ask people who have purchased from them before, they may have helpful information — like the best categories to buy, the customer experience, etc.
One great way to find out more about a liquidation company is to check out reviews online. You can make more intelligent bidding decisions if you have as much knowledge as possible about the item, business, quality of the goods, and return policies.
Review Purchase Conditions
Make sure you are aware of the inventory’s condition before placing a bid. Also, remember that some goods may need refurbishing, so be sure you have the time to fix them. If the website you’re purchasing from provides a manifest, review it thoroughly and try to understand the item numbers, descriptions, and estimated worth.
Get an Estimate of Your Shipping Expenses
Your shipping costs are the major determinant of your net profit when it comes to reselling. So, before you go ahead with a purchase, get a good estimate of the shipping costs. Sometimes, you may spend more on shipping than you did on the actual purchase.
Before placing a bid for a pallet, be sure the shipping expense is worth it. If there is a pickup option available, go for it if you can.
Ask around for the right pallets to buy especially if it’s your first time. For the first time, it is not advisable to buy a pallet of electronics because they may be hard to fix and that may turn out to be a loss in the long run.
Also, compare liquidation websites and go for the ones that offer the best prices. Remember, the goal is to resell and make a profit and you may have to spend on repairs, so it’s best to cut down the initial cost price to the barest minimum.
Once you’ve decided on a website and pallet, be sure not to plunge in deep, start with small financial investments.
How to Make Money from Selling Amazon Returns
As we mentioned earlier, the goal of buying Amazon returns is to resell them. So, the best way to make money from Amazon returns is to start a retail arbitrage business with your purchases. The only issue is that not all the products you get will be good, you may need to repair them before relisting them at a higher price.
Here are two tips to increase your chances of making money from Amazon returns.
Repair and Refurbish
Spend some time fixing and upgrading the products as much as you can to increase their resale value. The secret to making money from reselling customer returns is to make them look as good as new.
Most times, the products in the pallets come with missing parts or misplaced packaging accessories. Replacing missing parts and packaging materials can increase the resale value of your products.
Try Product Bundling
Product bundling is an effective strategy for selling out quickly. The hack is to pair complementary products and sell them off as a bundle at a discounted price.
You could sell a bag alongside a shoe of the same color. This way, you can exhaust the content of your pallet quickly and make your money back.
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Conclusion: Should You Buy Amazon Returns?
If you want to start a retail arbitrage with minimal upfront capital, then yes you should consider buying Amazon returns. But, it’s not 100% guaranteed to make you money because there’s a significant level of risk involved.
However, if you’re willing to go through with the risk, then it’s definitely a great way to make money online. You won’t need much storage space or any technical skill to start, all you need to do is boost the resale value of your products.
Reselling is a great way to join the Amazon marketplace, just weigh your options well before deciding to buy Amazon returns.