As a business consultant who assists entrepreneurs in ecommerce ventures, I am often asked about one of the most popular yet complex sectors – buying and reselling Amazon returns. When done correctly, scoring discounted Amazon merchandise in bulk for resale can become a highly lucrative side hustle or full-time business.
However, there are also risks like receiving defective inventory and challenges around organization and selling at scale. By following the comprehensive advice in this guide around sourcing, inspection, inventory management, and selling strategies – honed from my years advising small business owners – you can set your Amazon returns venture up for success.
Why Source and Resell Amazon Returns?
Before diving into the details, it helps to understand why buying Amazon returns can be so profitable:
- New and unopened items can often be acquired at 50-90% discounts compared to retail prices due to being labeled as "returns."
- Return pallet auctions and liquidated lots provide access to an immense variety of branded products.
- As an expert reseller, you can maximize profit margins through carefully vetting and selecting the highest demand product categories.
- By Q4 2022, the overall returns market is on pace to exceed $60 billion in the United States alone .
With some vigilance around inspection and quality control, this vast and continuously growing returns ecosystem offers tremendous buying opportunities.
Where to Source Amazon Return Pallets & Boxes
As an entrepreneurship advisor, clients often ask me – where exactly can I get my hands on these returned Amazon products? There are a few primary channels:
Amazon Warehouse Deals
Amazon itself resells some returned items. However, availability is limited and lots sell out extremely quickly.
Liquidators and Auctions
Websites like Liquidation.com, BStock Solutions, and Bulq allow you to bid on pallets, trucks, and containers filled with Amazon returns. I generally recommend newcomers start here.
Some wholesalers specialize in buying Amazon return pallets at scale, breaking them down, and reselling items individually. This can provide steadier inventory sources once you are selling consistently.
eCommerce platforms like eBay and Facebook Marketplace host individual sellers offering Amazon returns mystery boxes or lots. High risk of counterfeits – exercise extreme caution when buying here.
As your consultant, I would advise most entrepreneurs to begin their Amazon returns venture by sourcing pallets through reputable business liquidators that offer shipment tracking and condition guarantees. Expect to invest at minimum $500 to $1000 upfront per pallet based on the product categories that data indicates have highest resale upside.
We will cover inspection, evaluating product demand, and identifying the most profitable items later in this guide.
Key Aspects of Inspecting Amazon Returns
Once your pallets start arriving, comprehensive inspection and testing processes become crucial. As per my learnings from entrepreneurs, these are the most vital areas to examine:
- Verify counts of units promised against shipment documents
- Check expiration on any food, health items
- Ensure accessories like chargers, wires, batteries are sealed
- Assess physical condition thoroughly – scratches, dents, other damage
- Where possible, function test electronics, appliances
- Research defects noted in Amazon‘s return reasons
- Label items with your own internal condition ratings
I generally coach new sellers to categorize units into marketability segments:
- New Condition: Unopened box items can be resold as new
- Open Box: Great for local resale if all materials intact
- Parts Only: Defective items sold in lots or scrapped
With diligent inspection processes in place early on, you can accurately gauge product quality in your pipeline and command higher profit margins.
Complete Checklist for Launching Your Amazon Returns Venture
As we move towards discussing sales and marketing strategies, I want to provide this comprehensive checklist for preparing to buy and resell Amazon return pallets based on my learnings training entrepreneurs:
Initial Planning Phase
- [ ] Set profit margin targets – at least 50%+ recommended
- [ ] Calculate shipping costs at projected order volumes
- [ ] Define product mix based on sales velocity data for major sites
- [ ] Source reputable supplier(s) and analyze average pallet pricing
- [ ] Examine fees – storage, sourcing, shipping, tax implications
- [ ] Calculate total capital expenditure (CapEx) budget
Incoming Shipment Processes
- [ ] Perform multi-point inspection per standards above
- [ ] Categorize units by marketability groups
- [ ] Enter products into inventory system with sourced/inspection details
- [ ] List top sales rank items first with competitive pricing
- [ ] Ship using carriers with tracking – boosts conversions
- [ ] Reinvest profits to increase inventory volumes
- [ ] Provide exceptional customer service – pursue 100% positive feedback
While this may seem like a lot of upfront planning for those in startup mode, laying these foundations gives your Amazon returns venture the best chances of building towards steady profits.
Expert Tips for Pricing & Marketing Your Products
Once you have developed organized inspection and inventory tracking processes, leveraging my small business sales strategies can help your items appeal to an array of buyers:
- Price based on an item‘s existing Amazon sales rank – higher demand goods warrant higher markups
- Set prices at least 20% lower than Amazon listings for enhanced competitiveness
- Offer bulk order discounts to incentivize high volume purchases
- Develop promotional calendars around holidays and events
- Create regular email newsletters to engage customers
- Utilize targeted promotions – i.e. run electronics ads on tech forums
As you scale up, consider hiring online marketing professionals to manage paid advertising campaigns across platforms like Facebook and Google. This can drive substantial volumes of targeted traffic. Just be sure to analyze your profit margins against these additional customer acquisition costs.
Launching, growing and running a business reselling Amazon returns offers almost unlimited upside that is nearly recession-proof – but it does demand an entrepreneurial spirit. You can gain excellent resale value from returned items across virtually every category imaginable while also keeping products circulating and out of landfills.
It undoubtedly requires an organized approach and comfort with uncertainty as you never know exactly what may arrive in those pallets. However, by leveraging insider advice around sourcing reputable suppliers, implementing inspection guidelines, categorizing inventory, tracking sales velocity data and deploying proven digital marketing techniques – returns resellers can thrive.
Much success to you in tapping into this ever-growing circular economy! Please reach out with any other questions.