Customer returns are at an all-time high. In 2020 alone, $428 billion in merchandise was returned. The spike in eCommerce is playing a huge role (around 30% of online purchases are sent back) as are increasingly relaxed return policies. The point is, returns are running rampant!
Over the past few years, a shift has taken place in how retailers and manufacturers deal with their customer returns. Instead of putting them back on shelves or throwing them away, many are choosing to liquidate them. In fact, the amount of customer-returned lots listed across B-Stock’s network of liquidation marketplaces (vs. shelf-pulls/overstock) has steadily grown over the years.
As more customer returned auction lots pop up, we thought it was important to explain what – as a buyer – you can expect when sourcing this type of inventory. We even share how you can turn these customer returns into a profitable business!
What are customer returns?
Customer returns can be any piece of merchandise that you return to the retailer (both in-store and online). From that pair of shoes that fit too tight to the wrong size light bulb, most retailers offer some form of a return policy. And essentially anything you see on primary shelves can make its way to secondary shelves. That’s where entrepreneurs, along with businesses looking for a reliable source of inventory, come in. Customer returns can be purchased by the pallet and for pennies on the dollar.
So you want to buy an auction lot containing customer returns. Great! There are a few things to note:
Customer Returned = previously handled/shipped
Customer returns include merchandise that has been previously purchased and potentially handled, used, or worn. Sometimes returns are damaged in transit while on their way back to retailers or warehouses. While some items will appear like new, typically, you can expect signs of use, ranging from light to heavy.
Where to buy customer returns
Since we know every retailer deals with customer returns, you have plenty of choices available to you and your resale business. You can easily find retailers’ customer returns on their private marketplaces. Let’s break down a few of our top marketplaces for customer return pallets!
Amazon Liquidation Auctions
Since Amazon sells just about everything under the sun, it makes their returns extremely popular (and diversified). In fact, entrepreneurs start whole businesses around Amazon customer returns. Registered buyers on Amazon Liquidation Auctions can bid on overstock lots of all sizes of home goods, consumer electronics, toys, groceries, apparel, footwear, and more. Auctions are available in over 50 locations, too! And if you’re in Europe, Amazon Liquidation Auctions EU has you covered.
Walmart Liquidation Auctions
On Walmart Liquidation Auctions, buyers can find customer-returned mixed goods, electronics, furniture, bikes, small appliances, apparel, and more. Hundreds of pallets per day sold in less-than-truckload and full truckload auctions. For the Candian buyers out there, shop Walmart Canada Liquidation Auctions.
Target Auctions Liquidation
For a good variety across all categories, Target returns are a good bet! Bid on inventory across apparel & accessories, electronics, home decor, music & movies, household goods, shoes, appliances, sporting goods, toys, and video games.
The Home Depot Liquidation Auctions
If you’re looking for all things DIY and home & garden, Home Depot customer returns are for you. Bid on customer-returned and overstock tools, small appliances, doors, windows, flooring, hardware, kitchen, lighting, and plumbing. Lots come in a variety of sizes.
Tips for Buying Customer Returns
You should carefully read through the auction lot manifest to make the most informed bidding decision. Since merchandise will be sold as-is, it’s on the buyers to understand condition types.
Look at the marketplace CONDITIONS section
Each of our seller marketplaces has a dedicated CONDITIONS section that provides a detailed overview of what you can expect when purchasing customer-returned inventory. The CONDITIONS section is at the bottom of each marketplace page (scroll all the way to the bottom). Additionally, each auction manifest should contain information on the condition of the inventory.
Conditions of returned merchandise vary by retailer
Keep in mind condition codes vary depending on the retailer. For example, the Wayfair Liquidation Auctions marketplace has several grades for its returned inventory, while Best Buy Liquidation Auctions separates by New Condition, Buyer’s Remorse, and Tested Working. Department Store Auctions groups all customer returned merchandise together; the condition and mix of goods will vary in each lot.
Dot Com and in-store returns aren’t created equal
Some retailers separate their customer-returned auction lots based on whether they were purchased online or in-store. Dot Com returns are typically in better condition than in-store returns. When it comes to online returns, often the original packaging is intact. In some cases returns may even be brand new/unopened! There are a few reasons for this — like the tendency for consumers to order two or three styles of the same thing and send back the ones that don’t work — or the item may have been shipped incorrectly/undelivered. For more detailed information on all this, check out our post: Why DOT COM Returns are Worth a Second Look.
There will always be a degree of uncertainty
There’s always some risk involved when you purchase liquidation inventory. However, with customer returns though, you can strike gold just as quickly! Be sure to familiarize yourself with how each retailer categorizes and groups its customer-returned lots. While each retailer works to provide as detailed an item manifest as possible, it’s important to do your due diligence.
How to sell customer returns
Given enough customer returned inventory, you can build out a pretty solid side hustle. Whether you want to make money from home online, secure inventory for your business, or sell internationally, the buying and selling process is pretty simple. Here’s a quick summary:
- Bid and buy customer returns (on B-Stock, of course)
- Sort inventory when it arrives using the auction manifest
- Clean it up or make any necessary repairs
- Photograph inventory
- Price accordingly
- List your items for sale!
If you’re ready to start purchasing customer returns (and perhaps turning it into a business) check out Buying Basics: How to Become a B-Stock Buyer Part 1 and Part 2. If you’re ready to start browsing auctions, head over to B-Stock Auctions!