Tips for Successfully Profiting When Buying Customer Return Pallets
Ever wonder what happens to the products you have returned to the store? Perhaps you purchased a Christmas gift for a friend and mistakenly picked the wrong size, or something that they already have. Or maybe you found a better deal elsewhere and wanted to return the item so that you could purchase the alternative. There are many reasons why people return products to the store.
Most people have returned something to a big box store, small retailer, at some time in their life. These products that are returned or overstocked typically end up in the hands of a liquidation company which sells off the merchandise by the pallet.
As a reseller, you can take advantage of this opportunity by purchasing customer returns, shelf pulls, and overstock merchandise. It's actually quite simple to start a business selling this type of product. There are several models which you can create your business around.
Find a Liquidation Company
The best way to buy liquidated merchandise is to seek out a company which processes this type of inventory. You can typically buy for the price set by the company, or win an auction by bidding against other buyers.
Browse different sites and see what's on the market. Different companies may specialize in specific product categories. Do a lot of research and do a great deal of price comparisons to get a good understanding of what you should expect to pay. You want to be sure you are not over spending on a pallet.
Closeout Central is a directory for companies that sell liquidated goods. You can also discover reviews of top liquidation companies by word of mouth reviews on Youtube. Typically googling keywords related to closeout, liquidation, customer returns, wholesale liquidator, and more key words will yield google search results related to this.
Be sure that the company is a legitimate business before you make a wire transfer to their bank account. You can check their reputation by searching for reviews on the company. The next best way is to check the Better Business Bureau and search the business. Read their reviews if applicable. Doing this research will give you a peace of mind when buying pallets for the first time.
How Much Profit Can I Expect to Earn?
There are several ways to determine the amount of profitability from your purchase.
If applicable, examine the manifests and research the details. Important details include the brand, the original MSRP, the quantity of items, and expected condition.
If you are selling on eBay, Amazon, Offer Up, Facebook Marketplace, Let Go, compare what price your competition is selling the item for.
Selling in your local flea market is a viable option to quickly sell this type of merchandise. Flea market buyers are constantly seeking great deals.
The great benefit of purchasing wholesale liquidation pallets is that you are paying extremely low prices. Instead of paying 40 cents to 50 cents on the dollar from the manufacturer, you are paying anywhere from 7 cents to 20 cents on the dollar. This can allow you to discount your products on the marketplace, and it can allow you to generate more profitability as well.
Pricing Your Products
When you are selling liquidated merchandise, you have to consider your pricing strategy in detail. You will most likely not be able to sell at the original MSRP.
One of the most important factors of pricing is the market that you sell on. Are you an eBay, Amazon, Offer Up, Mercari, Shopify, Brick & Mortar, or Flea Market seller? Consider what suits you best, or maybe a combination.
Often, the best strategy is to price based on the market competition. This means comparing your selling price to others selling similar items on the market. You could even potentially price lower than competitors to win your customer's business.
Doubling the cost of your item is a good method for discovering what you should sell the item at. Since you paid much less in comparison to buying from a manufacturer at new condition, you will easily be able to charge twice the amount you initially paid. The downside of this method is that you could potentially be leaving money on the table if the market value is higher.
Keep in mind that since you are purchasing the merchandise at a steep discount, you may have a competitive advantage in comparison to other sellers.
Be a Smart Bidder/Buyer
If you are purchasing through an auction, there's a solid chance that you may save a lot of money because you are getting the true market price for the goods.
Before committing to purchasing through an auction, try to gather as much information as possible about the pallet or truckload you are seeking to purchase. Do a great deal of research on what winning bidders usually pay once the auction is over. By watching auctions and not bidding, you can determine whether or not you are over paying when it comes time to place your bid.
In many situations, it might be best if you back out of a bidding war as the price has gone up too high to be worth the time.
Good luck on your journey in purchasing pallets!