If you want to get brand name, Amazon inventory at dirt cheap prices, buying Amazon returns is the answer! In this complete 3000 word guide, I‘ll walk you through everything you need to know about sourcing, purchasing, and reselling Amazon return pallets as an experienced seller.
Whether you‘re just starting out or looking to grow your existing Amazon business, returns pallets present a huge opportunity to acquire discounted products in bulk that you can resell for big profits. I‘ve been selling on Amazon for over 5 years, and returns pallet arbitrage has been one of my go-to strategies.
In this guide, I‘ll share exactly how the Amazon returns process works, where to source pallets, what to look for, negotiation strategies, predictive analytics, common mistakes, and tips to maximize your profits.
If you want to unlock an easy way to gain access to dirt cheap name brand inventory, you don‘t want to miss this comprehensive roadmap. Let‘s dive right in!
Why You Should Consider Sourcing Amazon Returns Pallets
Before we get into the nitty gritty tactics, it‘s important to understand exactly why buying Amazon returns pallets is such a smart inventory sourcing strategy for Amazon sellers. Here are the five main benefits:
1. Significant cost savings
The #1 advantage of buying returns is the massive cost savings. Because these pallets are essentially leftover inventory that Amazon needs to liquidate, you can acquire products for literal pennies on the dollar.
We‘re usually talking 70 to 90% off retail prices. Even better, the items inside are often completely new and unopened since return rates in many categories exceed 30%.
Instead of paying $100 for an inventory unit, you may pay just $5 to $10 buying in bulk pallet quantities. The more you purchase, the cheaper the per unit costs get.
2. Build instant scale
Running out of inventory is one of the fastest ways to tank your Amazon sales momentum. Return pallets allow you to quickly stock up on hundreds or thousands of units in a single purchase.
This lets you rapidly expand your product catalog and inventory depth to keep driving sales. Long story short – more products in stock = more sales.
3. Establish new product lines
If you‘ve been wanting to expand into new niches or product categories, returns pallets make it easy. The variety in a single pallet allows you to test different items without committing.
You can use the data to determine which segments have the highest ROI for your business. Then simply stock up on more pallets in those categories.
4. High profit margins
Due to the incredibly low wholesale acquisition costs, profit margins are through the roof. After accounting for your Amazon seller fees, shipping costs, and other expenses, expect 30-50% net profit on each unit sold.
Some refurbishers will clean up and fix returned electronics to sell as "renewed" for 5X what they paid. The profits opportunities are huge if you get a little creative.
5. Demand for name brand items
These pallets contain all kinds of name brand products shoppers already love and trust. Brand reputation saves you time and money building awareness for unknown labels.
Instead, you instantly gain access to high-conversion inventory when you source coveted brands like Apple, Nike, Samsung, Mario Badescu and more.
When you compile all of these factors – extreme cost savings, massive volumes, variety, profit margins, and brand demand – it‘s easy to see why investing in returns pallets can transform your Amazon business almost overnight!
Where Do Amazon Returns Actually Go?
Before jumping into the sourcing strategies, let‘s briefly cover what actually happens during Amazon‘s returns process. This will make it easier to understand how you gain access to these pallets:
Item is returned by Amazon customer to fulfillment center
Item is checked against invoice and scanned into inventory
Return is issued to seller‘s account and refund initiated
Automated triage separates returns into categories
Unsalable items are disposed of or recycled
Electronics and products above $200 are inspected and resold
Everything else is aggregated onto pallets…
Then sold via B2B marketplace to resellers like us!
As you can see, Amazon handles processing the returns coming back from customers across their vast fulfillment network. Defective, broken, and unsalable units are filtered out.
What‘s left is aggregated onto these magical pallets according to category, ready for businesses to purchase.
Now let‘s dive into where you can find them…
Where To Buy Amazon Return Pallets
There are a handful of business-to-business marketplaces and auction platforms focused on selling Amazon return pallets. Here are the main ones to look at:
Liquidation.com is one of the largest online auction sites with Amazon return pallets among its massive inventory.
You can bid on pallets via timed auctions. They also run exclusive auctions for larger wholesale buyers.
- All major retail return categories
- Mixed general merchandise pallets
- Manifest reports on contents
- National shipping or local pickup
Bulq has emerged as a leader in sourcing and reselling authentic Amazon return pallets.
They work directly with Amazon‘s liquidation centers to buy bulk quantities across all categories.
- New pallets added daily
- Detailed manifest reports
- Instant Buy Now and auctions
- Low minimum orders
- Free storage and repackaging
Direct Liquidation offers an extensive inventory of new and unused Amazon return pallets in most major categories.
They also sell Target, Lowe‘s, Walmart, Best Buy, and more.
- Mostly new and unopened stock
- Mixed category and product-specific pallets
- Manifest reports on all pallets
- Low minimum orders
- 5 warehouses across US
888 Lots focuses on smaller mixed wholesale lots instead of full pallets. This is a great option for testing smaller quantities.
You can Buy It Now for fixed pricing, or place bids on timed auctions.
- Smaller box and pallet quantities
- Detailed product descriptions
- Buy instantly or bid to win
- Bulk discounts at higher quantities
- Low minimum order sizes
How To Score The Best Deals On Return Pallets
Now that you know where to source Amazon return pallets, let‘s explore some tips and strategies to help you score the absolute best deals:
Focus on high ROI categories
I advise limiting your search to 2-3 categories max when starting out. You don‘t want to spread yourself too thin.
Prioritize categories like books, clothing, toys, beauty, and smaller electronics that sell quickly and have higher margins.
Set profit margin minimums
Before bidding or buying, calculate your profit margin using the manifest retail value and pallet price.
I look for at least 100% ROI as a minimum, but you may want to aim for 200% to 300% starting out. Don‘t settle for less than double your money.
Bid early or late
Look for liquidation platforms that offer blind bidding. Enter your max bid early to anchor expectations.
Or snipe in the closing seconds to win auctions that didn‘t meet reserve pricing.
Buy at volume
Look at cost per unit instead of pallet price. The more you buy, the cheaper the per-unit costs.
Build relationships with sellers and ask about volume discounts for repeat purchases.
Wait out Auctions
Patience pays off. Let auctions run their course to buy unsold lots at lower reserves.
Set snipe bids to beat the competition at the last second without overpaying.
Account for all costs
Factor in shipping, storage fees, prep time, listing fees, etc. Calculate your true break even costs.
Focus on condition
Prioritize pallets with mostly new/unopened condition items according to the manifest codes.
Lightly used can be OK for quick flips. Heavily damaged is better for scrap.
Step-By-Step Process To Purchase Pallets
Once you find some promising pallets, here are the steps you‘ll follow to purchase:
Request manifest – Ask seller to send full manifest report detailing contents, value, and condition.
Review contents – Scan manifest and look up current selling prices on Amazon and eBay. Calculate profit potential.
Compare against other pallets – Weigh your options across multiple sellers or listings to find the best deal.
Place bid or buy – Enter your max bid on auctions or purchase Buy It Now listings.
Pay invoice – Pay via card, wire transfer, PayPal etc. Many sellers offer payment plans on higher dollar purchases.
Schedule shipment – Most sellers can handle freight arrangements, or you can arrange pickup or third party shipping.
Receive and inspect – Inspect all items against the manifest and identify any discrepancies immediately.
File inspection report – Document any damaged, missing, or inaccurate items and request a refund or credit if warranted.
Prep and resell – Clean, test, price, and photograph items to resell on Amazon, eBay, Shopify, etc.
Scale up – Roll profits into buying larger quantities and expand into new categories.
Following this simple process will ensure you are fully informed and protected when investing in Amazon return pallets.
Expert Tips To Improve Sourcing Results
Over my years buying Amazon return pallets, I‘ve learned a few expert tips and tricks to improve sourcing:
Leverage data – I built a custom reporting dashboard that tracks ROI by category, profit margins, sell-through rates, and more for previous pallet purchases. This helps me make smarter decisions on which pallets provide the highest return.
Focus on trends – I study search trends, seasonality reports, and best-seller charts to target items likely to sell fast with high demand. This minimizes risk and holding time.
Build seller relationships – I cultivate close relationships with buyers at the major liquidators. This provides me first look at unlisted inventory and better overall service.
Always verify condition claims – Some manifest reports exaggerate condition, so I‘ve learned to scrutinize closely and assume uninspected items are one grade lower condition than listed.
Watch out for manipulation – Sellers will sometimes bid up their own auctions to hit reserve pricing. I stick firm to my max bid limits to avoid overpaying.
Standardize listing processes – I created listing templates and inventory management workflows to quickly prep and list new pallet items across multiple sales channels for velocity.
Focus on value density – I pass on bulky, oversized items unlikely to yield decent profit margins given freight and logistics costs. Instead I look for easy-to-ship pallet contents.
Hopefully these provide some helpful guidance you can implement into your own Amazon return pallet purchasing strategy right away.
Common Mistakes To Avoid
While buying Amazon return pallets can be extremely lucrative, it does come with some risks and downsides. Avoid these common mistakes:
Not inspecting contents – Some sellers try to process returns sight unseen. But not verifying condition and contents against the manifest is asking for trouble. Budget time for inspection.
Overpaying – Newbie buyers get caught up in bidding fever or fear of missing out. Set firm ceiling bid limits based on diligent profit potential research.
No exit plan – Don‘t get stuck with unsalable inventory or slow movers. Have a liquidation plan in place to sell at a discount or scrap items.
Underestimating costs – Shipping, storage, listing fees, predictive pricing tools, and other expenses add up quickly. Account for all costs in your projections.
Poor storage solutions – Disorganized pallets waste time and lead to misplaced inventory. Use shelves, racks, and bins to neatly store and access.
Failing to specialize – Randomly buying different categories leads to excess knowledge gaps. Specialize in 1 or 2 areas with highest margin.
Ignoring laws – Not having required reseller permits or business licenses can jeopardize your business. Do your due diligence.
Is Buying Amazon Returns Right For You?
At the end of the day, should you look into buying and reselling Amazon return pallets? Let‘s weigh the key pros and cons:
- Extremely discounted name brand inventory
- Ability to rapidly scale up inventory
- High profit margin potential
- Low overhead and startup costs
- Full truckload volumes possible
- Shipping can eat into profits
- Storage space may be required
- Items may have condition issues
- Inspection and prep take time
- Reselling experience required
For sellers comfortable sourcing quality inventory and willing to put in work prepping, listing, and shipping items, returns pallets represent an unmatched opportunity.
But it does require knowledge and experience, so start small, focus on faster selling segments, and reinvest profits to grow – don‘t make big, risky bets upfront.
That wraps up this complete guide to buying and reselling Amazon returns pallets. I hope you feel empowered to unlock huge profits leveraging return pallet arbitrage.
As one final tip – have fun with it! There‘s an exciting treasure hunt element as you dig through each new pallet. Just stay organized, work smart, focus on value, and scale wisely.
You can absolutely generate big Amazon sales and profits buying returns if you follow the strategies and best practices outlined above. But please feel free to reach out if you have any other questions. I‘m always happy to offer guidance to fellow sellers.
Now get out there, source some pallets, and take your Amazon business to the next level!