Making online purchases is becoming the preferred shopping method for many customers. There are multiple ways to start selling online, but there is one that is easy, cheap and with a potential profit, Amazon return pallets.
If you’re a business owner actively seeking Amazon returns then find out how and where to look for Amazon return pallets and check if this is or isn’t an opportunity to profit on the secondary market.
Related reading: How to Sell Used Items on Amazon [2022 Guide]
What Are Amazon Return Pallets?
Certainly, Amazon's free return policy is having a knock-on effect on the practice of buying and selling Amazon return pallets. The giant retailer offers free returns in certain cases to customers (e.g., damaged items, late arrival, etc.), which has led to an increase in the number of product returns.
How Customer Returns Affect Amazon Sellers
Amazon’s returns come at no cost most of the time to the customers and are also prone to abuse and return fraud. The only exception is if the reason for return isn't a result of an Amazon.com error, the cost of return shipping will be deducted from the refund. But in the other cases, how exactly this policy affects sellers?
The expenses that come out of your account every time customers return orders can end up having a high return rate which is terrible for account health and could even lead to account suspension.
Also, add the monetary loss generated by the return of a product. Read more on how to appeal an Amazon return here.
Every product returned to Amazon is inspected and if it meets Amazon's high standards to be resold as new, it’s re-listed for sale.
Although for many small businesses, the cost of reopening, repackaging, and restocking those items is huge. A great alternative to having the inventory removed or returned to the seller is Amazon return pallets.
Thus, Amazon return pallets are pallets of goods that have been returned to Amazon. These pallets are sold unseen at discounted prices to sellers who want to take the risk.
You can make a lot of money by refurbishing and reselling used items online.
Where Do Amazon Returns Go?
According to many Amazon third-party sellers, dealing with customers abusing Amazon’s lenient return policy is considered part of the business.
At least 30% of online orders are returned and nearly 9% of products are returned to brick and mortar stores. One big reason for this is that the retailers offer customers easy, convenient, and quick ways to return orders.
Those sellers who sell on Amazon know that the Amazon return policy is very lenient to customers who want to return items.
In fact, according to Statista, almost half of the customers return their online purchases.
Amazon announced at its Amazon Accelerate 2021 event the launch of two liquidation resale programs that allow sellers to resell customer returned items, such as Grade and Resell, a program that enables FBA sellers to relist returned or unsold inventory as used.
Also, a daily deal site called Woot, an Amazon company.
How to Buy Amazon Return Pallets
As a result of returns and the significant cost sellers shoulder to put products back on sale, they look for easier and more economical ways to sell them: liquidation.
Amazon accumulates many products that are packed on Amazon Return Pallets with either random merchandise or sorted in specific categories. Entrepreneurs can find a great opportunity to profit on the secondary market by reselling Amazon return pallets.
Instead of going through a middleman who purchases and processes the merchandise and then sells it to you at a profit (reducing your potential profit to cover the costs and profit of the middleman), you can find Amazon return pallets at liquidation platforms.
What Can You Expect From an Amazon Return Pallet?
Return pallets are usually sold in bulk with a large variety of different products, such as clothing, electronics, beauty products, and so on.
Here’s an Amazon return pallet auction from Liquidation.com:
So for the example above specifically, you get 84 items with a suggested retail price of $2,168, and right now the top bid is $240.
Usually, there are a couple of photos that oftentimes aren’t really helpful, so you don’t get a view of the whole pallet. But on some liquidation websites, you can see everything the pallet includes because they provide buyers with a manifest, where they list every item that’s in there.
The caveat is the items may be in bad condition. Some items will be ready for resale immediately, others might require some repair, and some can only be sold for parts.
Occasionally, you can also see on the manifest that even though each bundle is categorized, there are still some random items in each pallet.
How Much Can You Make Buying and Selling Amazon Pallets?
If, when you buy a pallet, you have a list of items like above then you then need to start doing your own due diligence to figure out how much money you can make. In a manifest like above, you're given a list of Amazon ASINs. An ASIN is Amazon's unique code that it gives to each item in it's catalog and each item can only have one page on Amazon. Take this ASIN and go to www.amazon.com/dp/[ASIN]. So, for example, the Fast Lane Sand Shark item above has an ASIN of B01K26TIDQ meaning the page on Amazon for that product is www.amazon.com/dp/B01K26TIDQ.
Now you want to use a tool like Helium 10 to show you exactly how many items a month that product is selling on Amazon. Regardless of whether you plan to resell your items on Amazon, eBay, or at a garage sale, seeing how many units a month that product is selling is a good indication of how easy that item will be to resell.
In this case, we can see that this product is selling about 1 or 2 units a day. It isn't huge, but if you're able to win the buy box you can expect that it would take you about 15 to 30 days to sell out of this product – not bad.
How to see how much money a product is making on Amazon
Many people buying pallets of returns will actually want to resell these items back on Amazon. You can easily go on to Amazon and see how much money an item is selling for but the big question is – do these items actually sell on Amazon?
Thankfully there is software that will tell you exactly how many units of a product are being sold a month and how much money they're making.
Tools like Helium 10 will show you exactly how much money a product is making each (and they will show you sales data for months and years ago as well). If you're planning to do buy pallets and resell them on Amazon, a tool like Helium 10 is absolutely required.
You can use the coupon code ECOMCREW50 to get 50% off Helium 10 (affiliate link)
How Much Is an Amazon Return Pallet?
Prices for Amazon return pallets will vary depending on the liquidation website (some prices are fixed while others run via auction) and the size of the pallet. In general, prices can range from $100 to $5,000, depending on the quality and the value of the items. Also, others can be as high as $10,000.
Shipping options and rates will also vary per liquidation company. You will need to pay for the shipping of the pallet, which depends on the weight, dimension, and distance from the warehouse to your address. However, others will offer you a flat rate or free shipping.
Overall, shipping costs could be more than the combined amount you pay for the items on the pallet.
How to Make Money Using Amazon Return Pallets
When you're buying goods for cheap and hoping to sell them for more money, this is what is called Retail Arbitrage.Retail arbitrage is one of the easiest and cheapest business models for someone that is starting out with ecommerce. Many entrepreneurs have turned this gig into a full-time income job.
Retail arbitrage has pretty good margins and is also fairly easy to get started, but requires you to constantly be hunting through the discount aisles of places like Walmart, Home Depot or liquidation websites to find good deals and sell them on any platform like Amazon or eBay. Buying pallets of goods reduces a lot of this work because now you're buying dozens or hundreds of items at a time instead of just a few.
When selling Amazon returning pallets, you can start with a smaller capital compared to private labeling and wholesaling. Some sellers test the waters first by purchasing $200 Amazon return pallets to see if the system works.
Furthermore, you don’t have to put in much marketing effort because the brands are doing it themselves.
However, it’s important to remember that simple as it may be, it’s still a business endeavor and requires work and planning on the part of the seller.
When choosing Amazon return pallets, most of the time you are paying a much lower cost per item than you would get from buying from retail stores and sometimes even wholesale. And even though some items in the pallet turn out to be unsellable, you can still keep it for your own use!
The downside of this is that most of the liquidation websites only ship to the US. In this case, you can find other options like Craigslist or some other liquidation platforms that are not so popular as the ones will mention below.
Where Can I Buy Amazon Return Pallets?
Here are some of the liquidation companies that sell Amazon return pallets:
Direct Liquidation is an online marketplace that allows resellers to purchase liquidated merchandise. This wholesale marketplace works with big stores like Walmart or Lowes, and the website will enable you to search by brand or store.
All sales are conducted by auction. Therefore, pay more attention if you decide to bid for a pallet since this platform doesn't have much information about the pallets you are bidding for.
Liquidation.com is one of the largest liquidation online companies. It works with many retailers and is popular among customers who buy Amazon returns for their reselling business.
Just like Direct Liquidation, Liquidation.com sells Amazon return pallets through auctions. Liquidation.com also does not give any information about what type of products is contained in each pallet.
Just like Direct Liquidation and Liquidation.com, B-Stock Supply is also an online auction marketplace. Here, resellers can source returned merchandise from other businesses.
BStock Supply is like an eBay of pallets where you can get a pallet from $300 to greater than $5,000. However, they only sell Amazon products to the United States and Europe.
Craigslist is a hidden gem in regards to getting pallets of merchandise. There’s a good chance you’ll get a great deal here, although you may not find many results depending on the area where you search.
This is a pallet liquidation place with general merchandise liquidation. It’s located in New Jersey so freight might be an issue if you’re on the west coast area.
Additionally, they require a valid resale certificate for customers based in the US and a valid business registration for non-US customers.
What’s nice about 888Lots.com is that you can buy individual items with great discounts but the majority of the merchandise can be damaged, so it’s up to you to take the chance or not.
Additionally, they include a detailed description of what’s inside each pallet and even they provide resellers with an Amazon profit calculator tool so you can find out if it's worth it to sell these products.
You can find liquidation warehouses in the big cities of any US state.
Often online liquidators and returns sellers just straight up lie about the content percentages and values, knowing people will just take it and not complain. But if you can get your eyes on the pallet in person, you're already ahead of the game.
Simply, you can do a google search to find out which is the closest liquidation warehouse to your city.
Things You Should Consider When Purchasing Your First Amazon Return Pallet
- Compare different liquidation companies and try to buy returns at lower costs which can maximize your margins.
- Make a small investment to see what the pallets are like first.
- Don’t buy a pallet of used electronic items for the first time. There is a high possibility that the items won’t work, and if you don’t know how to fix them, it will turn into a total loss.
- Some liquidation companies will charge you for the shipping of your return pallets. Check freight costs before purchasing an Amazon return pallet. It could be more expensive than the amount you pay for the goods.
Pros and Cons of Buying Amazon Return Pallets
Here’s a recap of the pros and cons of buying Amazon return pallets:
Pros of Buying Amazon Return Pallets
- You can use any Amazon Profit Calculator to evaluate if it’s worth it to sell certain products.
- You don’t need much storage.
- It doesn’t require a big investment.
- You don’t need technical skills, so it is a good way to start an ecommerce business.
- Cut out the middleman and maximize your profits.
Cons of Buying Amazon Return Pallets
- Some online liquidation companies won’t give you any description of what kind of products are inside the Amazon return pallets.
- You cannot grow or scale with this business model.
- Often, you’ll collect used items that you aren’t able to resell.
By flipping Amazon return pallets for cash, you can make a great amount of money. But it will depend on the time and knowledge you put into it to make it more profitable. For example, you want to make used merchandise as new as possible by refurbishing it in detail.
Although there aren’t many risks when choosing this business model, online arbitrage, and selling Amazon return pallets, it is true that you won’t scale to the next level. However, it can be a good way to start an ecommerce business.
Have you ever purchased an Amazon return pallet? How was your experience? Tell us in the comments section below!