The underbelly of e-commerce is a booming business in which little-known companies collect, process and often resell piles of unwanted gifts, flawed merchandise and other items that shoppers simply regretted buying. This holiday season, goods with an original retail value of $19.4 billion—nearly one-quarter of e-commerce sales—are expected to be returned, according to Shorr Packaging, a distributor of packaging to retailers and other businesses.

B-Stock Solutions Inc., a returns-logistic provider, helps retailers including Wal-Mart Stores Inc. and Home Depot sell returns in smaller volumes, typically by the pallet-load. “We transform [them] into bite-size chunks that a much larger audience can digest and that drives the price higher,” says B-Stock Solutions CEO Howard Rosenberg. The pallets are auctioned off on the Internet, and buyers pick up the items directly from the retailers’ warehouses.

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