The more consumers shop, the more likely they are to make returns. Customer returns are an inevitable part of doing business, especially with the continued growth of eCommerce. In 2020, consumers spent $861.12 billion online with U.S. merchants, according to Digital Commerce 360.
When you consider 30% of all products ordered online are returned–compared to 8.89% in brick-and-mortar stores–you might be wondering what happens to all those returns? For businesses like Amazon, the volume of returns and time it would take to reinspect or relist these items is simply not worth it. Not to mention, it costs too much money to continue storing these returns when they could make space for new items. What they do instead is sell them at huge discounts on online liquidation sites, freeing up warehouse space, and earning a bit of profit back all in one!
For start-up retailers, discount store owners, flea market vendors, and online resellers, selling Amazon customer returns is a great opportunity to turn a profit.
The simple answer is yes. Reselling online is completely legal and surprisingly easy. The term for this is retail arbitrage. Retail arbitrage is the process of buying goods at a discounted price and selling them higher, for a profit, usually online.
For example, say Amazon has a sale on keyboards. The original MSRP is $30, but on sale, the price is $15. You purchase all the keyboards they have in stock at the discounted rate and resell them for $29 a piece. You make a $14 profit on every keyboard you sell (excluding taxes and shipping). This is retail arbitrage. You can apply this method to absolutely any consumer good. The most common items that resell for strong profits include toys, appliances, electronics, and clothing.
First-time buyers should note that the moment a customer breaks the seal on an item and sends it back, it is no longer considered brand new. It will always be a customer return with varying conditions. Sometimes, you’ll get original packaging, other times you won’t.
Buying Amazon returns can be done from the comfort of your home (or mobile device) and is actually quite accessible. Since Amazon rarely re-packs such goods to be sold again as new, you’ll find graded customer returns on Amazon’s “Warehouse Deal” sale. Which is one way to go if you want to buy individual Amazon returns. However, you can get much more bang for your buck as a reseller by purchasing Amazon customer return pallets.
If you go through Amazon’s online liquidation marketplace, you can get quality customer returned merchandise straight from the source.
A few things worth noting:
B-Stock operates online marketplaces for large retailers and manufacturers like Amazon, The Home Depot, Walmart, Target, Nordstrom Rack, Whirlpool, and more. Through these official B2B marketplaces, retailers auction off their liquidation inventory in order to recoup profits and shelf space. Via Amazon Liquidation Auctions, you’ll find bulk quantities of products across all categories and conditions from new/unopened to salvage and customer returns.
So you know all this relatively good inventory is available, but how can you start making money selling Amazon returns? Let’s break it down.
This is good practice if you are new to the reselling world. Take an audit of reselling platforms like eBay, OfferUp, and even Amazon. Each one has unique communities and guidelines. For example, Amazon has a few more restrictions when it comes to clothing, electronics, and health and beauty items. Using the Amazon app, you can scan products to see how much they’re reselling online for plus learn if any items are gated or restricted. This is helpful in determining how much profit you could make and what kind of ROI you’re going to get.
Check buyer demand for items you want to resell. Health and beauty products are typically considered necessities. Others might be considered more luxury or seasonal. Sales velocity is important here. If the product is outside of Amazon’s 50,000 top sellers ranking then better steer away from that. It might be too risky to start off with and you could end up with boxes and boxes (or pallets on pallets) of products that not many buyers are interested in. You want to buy low, sell high, and move quickly. That is going to require a decent buyer demand.
You can consider starting with a category you know well. If you are the chef of your household and are always looking at the latest kitchen appliances and gadgets, this would be a good category to choose! Knowing the products you’re trying to resell will help you navigate pricing and make your online listings more attractive. And you already have a headstart knowing what models and colors are in style!
You will need some initial cash on hand to start bidding and buying liquidation inventory. Or secure a line of credit for upfront costs and then reinvest your profits in your resale business. The dollar amount will depend on the size of your operation. Budget for costs like packing materials, storage space, and bookkeeping software.
If you want to save on shipping costs for now, try reselling platforms like Facebook Marketplace and Craigslist. That way you can meet in person and not worry about shipping to your customers just yet. However, this will limit the reach of your resale business and in turn, create a smaller buying pool.
The Fulfillment by Amazon (FBA) program enables resellers to ship and store items through Amazon’s own warehouse operations. You get to make your sales without worrying about storage or shipping—Amazon will handle that for you! Of course, using this program comes with its own fees. You’ll want to make sure you’re still able to make a profit between FBA costs and what you’re selling products for.
None of these steps will be possible without your reseller certificate. You should have your resale business registered with documentation ready to support this. Many sites won’t let you buy liquidation inventory without one. Wholesale sites are another great example from which you can source inventory. But the thing with wholesale sites is that these are generally not available to the standard consumer.
Wholesale is good for having a fixed price, but inventory quantity will vary substantially. And again, some of these goods might be purchased from liquidation bulk lots already and sold at a higher markup.
If you want to cut out the middleman and take it upon yourself to source from these retailers directly, then try B-Stock. We help operate some of the world’s largest retailers’ online marketplaces to suit your reselling needs. B-Stock builds retailers and manufacturers their own auction platform to sell returns, overstock, and other liquidated assets directly to business buyers. We have dozens of private retailer marketplaces in a multitude of categories and conditions so you can start making money selling Amazon returns (and more) quickly!