(aka: how to bank on the busts of retailers and manufacturers)

Customer returns of clothing, shoes, and accessories are at an all-time high: tens of billions of dollars worth inventory gets returned each year, most of which can’t go back on store shelves. But one retailer’s headache is a Poshmark seller’s opportunity: there has never been a better time to think about buying returned or overstock name-brand and luxury fashion to resell.

Here are some tips on what you should look out for when buying customer returns and excess merchandise to resell on Poshmark:

It’s best to buy online + directly from the source

By purchasing directly from the retailer you can assume that there is no middleman involvement and no price mark up. Historically, it has been difficult for small online sellers to buy returns and overstock directly from large retailers and apparel brands; over the past few years however, a shift has taken place in how organizations offload their excess goods: many are leveraging B2B marketplaces to sell smaller lots of inventory directly to small business buyers (who resell on marketplaces like Poshmark).

        

The key is to make sure you are buying from a known brand: many top retailers like Macy’s have their own marketplaces for bulk quantities of returns and shelf pulls, while others leverage multi-seller marketplaces that have dedicated sections for apparel and accessories like B-Stock Supply. In the case of multi-seller marketplaces, be sure to use one that has a seller rating system, so you know you are buying from a reputable seller.

Online auction marketplaces to help with margins

An affordable (and efficient) way to secure product is by tapping into online auction marketplaces that sell luxury and name-brand returns and shelf pulls. Purchasing through an online auction marketplace can be a great, cost-effective way to find inventory because you’ll see what others are bidding and never pay more than you want.

         

Understand what you are purchasing

It always pays to be detail oriented, especially when sourcing returned and overstock inventory. Ideally, you should be able to view a full manifest of the inventory, but that is not always available. The key is to make sure you have as much available detail on the merchandise as possible before you buy, including: a thorough description (including brand names), actual images of the inventory, lot size, condition codes, and shipping dimensions and costs.

Know your condition codes

Returned and overstock items can range from brand new with tags to light use to salvage condition. Because this merchandise is typically sold “as is,” be sure to familiarize yourself with each condition category, keeping in mind that different retailers may categorize the inventory differently. A credible seller or marketplace will have a dedicated ‘conditions’ section with thorough descriptions for each of the conditions.

Product condition affects resale value of the item(s)

The better the condition of the item, the more you can sell it for. For example, new without tags will sell for slightly less that new with tags, while an item in its original packaging will fetch a higher price. You want to be sure you can still turn a profit when you break the bulk lots into individual items, so bid carefully.  

Make sure you have access to a constant supply of product

Do you specialize in a specific brand or size? It’s important to have enough items to keep your followers coming back – and to attract new ones. By purchasing from a retailer’s B2B marketplace that sells pallet-size lots of name-brand apparel and accessories you’ll ensure a constant, dependable flow of inventory.

Calculate shipping costs

It is important to calculate shipping costs into your budget. To reduce costs, look for sellers that have distribution centers near your geographic region and will either allow you to arrange your own shipping or will provide discounted rates on regional shipping. Ex: Macy’s ships out of locations across the U.S.

Quantity matters

You’re probably well versed in what the competition is doing and how much buyer demand exists for products. There are some great deals available out there and it’s typical that larger lots allows for a lower cost per item, but you don’t want to purchase more than you can sell.   

Learn more by visiting our fashion marketplaces: