We’ve all been there. You got a gift you hate or made an impulse buy you later regretted. Maybe you got home and realized that you don’t have space for that kitchen gadget you just bought or that sweater you thought had to have is already in your closet. Whatever the reason, it’s time to return your purchase. But what does the store do with all of those customer returned items?
You might think they put them back on the shelf to resell, but in most cases, you’d be wrong. In fact, less than 10% of customer returned items actually go back on store shelves. Stores don’t want to take the time to inspect returned merchandise or spend the money for reprocessing, so mostly they just liquidate these items alongside overstock inventory.
Most of the time these liquidations are handled via auctions, often selling crates, pallets, or entire truckloads of merchandise at a time. These auctions may include a wide variety of items or only items from a single category.
Why would anyone purchase a whole truckload full of customer returned items? Simple: to resell.
Reselling overstock or store returns is a lucrative business. Resellers purchase overstock or returned merchandise at a steep discount through liquidation auctions. Then they mark up and sell the merchandise through physical stores, or more often online.
Not only is this a fun and interesting way to make money, but it can also prove exciting to purchase auction lots that contain unknown products. The surprise of unboxing is reason enough for some to get into this business.
For other resellers, detailed manifests are a must. These liquidation buyers want to know exactly what they’re getting so they can run a thorough analysis and know exactly what sort of return to expect on their investment.
If you’re new to the reseller concept, you may not be aware of the multitude of sources for such merchandise. When you first start, you may not be aware of your options, and it’s not uncommon to fall prey to unscrupulous sellers and end up with piles of junk. Other buyers aren’t aware of the liquidation auction concept and try to make a living buying clearance goods to resell. But buying items individually and with minimal discounts means you can’t scale your business and you’re unlikely to get much profit from it.
There are bad actors out there who will purchase liquidation auctions directly from big brands like Amazon or Walmart, then take the good stuff out of the lot and sell the rest to unsuspecting buyers. If you find yourself caught by one of these liquidation auctions, you may end up with a whole shipment full of broken merchandise or products you simply won’t be able to move efficiently. How do you avoid this pitfall and get your hands on quality liquidation merchandise that will help you build your reseller business?
It’s simple. Go straight to the source. The best option is to buy your liquidation auctions directly from the brands you know, love, and trust. This is where B-Stock marketplaces can help. When you purchase from these listings, you know you’re getting quality liquidation lots directly from big brand names like Best Buy, Walmart, or Lowe’s. You’ll never have to wonder if someone has already picked over an auction lot, and you’ll be cutting out the middleman so you can be sure you’re getting the best possible price.
Now that you know where to buy returned merchandise, what are the next steps? If you want to know how to buy overstock merchandise, we’re here to help.
The first thing you need to do is set up your business. Yes, that’s right, this is a real business and there’s paperwork to be done. You’ll need to register for a tax ID number to be eligible to bid on B-Stock auctions. If you want to be successful, you’ll also want to draw up a business plan and do some market research before you place your first bid.
There are a lot of considerations you’ll need to think about when you’re starting a reselling business. For more information, why not check out our Buying Basics series? You’ll find details on how to read a manifest, info on shipping, and much more. Once you’ve read through these articles, our B-Stock Buyer Blog is a great place to find more information about the liquidation world and how it works. And remember, our buyer support network is full of resources like financing options, logistics and fulfillment companies, and even inventory processing.