Making Profits with Customer Returns

If you are in any way involved in the business of buying and reselling merchandise, you are familiar with the difficulties that venture entails. Having a stable supply of cheap quality merchandise is key to stay afloat in this increasingly competitive market, where the prices of single items on websites like eBay or Amazon are hovering just above wholesale.

Buying merchandise from wholesale suppliers works best if you have been in the business for a while and have built up a good business relationship with the supplier. Even then, the ‘special treatment’ such as lower prices might not leave you with enough of a profit margin to stand out from the competition.

You need to do more than just buy the first pallet you see for sale that looks like it’s a good price. Today’s market is a cutthroat world, where you need to stand out from the competition. To make sure you get noticed, you must have quality merchandise as well as the best prices. This can be achieved if you know where to look.

When hearing about customer returns, your first instinct may well be to skip over that offer and move on. You probably assume that customer returns are the same as broken, defective and low-quality merchandise. In other words, you may think that customer returns do not offer the quality you need to be successful in this business.

However, that might be a mistake that will allow your competitors to gain an advantage over you. So, next time you see customer returns on offer by your supplier have a look at it and consider it as an option.

Here is how you can make that merchandise work for you.

What are Customer Returns?

When a customer for whatever reason returns a previously purchased product to the store for a refund, or in exchange for another product, this is called a customer return.

Products are returned for various reasons and not only because they are faulty. Some are even sent back to the seller in the original packaging, unopened. This means you can find plenty of quality products among them.

With the explosion in e-commerce, there are more and more opportunities for those who want to sell customer return products. Around 30 percent of all products purchased online get back to the sellers. This means there is a huge quantity of good-quality products out there for you to buy from their original retailers and then sell for a significant profit.

The reasons that lead customers to return products they have purchased online vary. They include the product being the wrong size (especially in the case of clothing), the item not meeting customer’s expectations, the product not matching the website description, or simply due to the seller shipping the wrong product.

As you can see from the listed reasons, the fact that a product was returned does not mean that it is faulty or substandard in quality. Rather, the product may just not be what the customer wanted, and so it is returned unopened and is still basically brand new.

The problem retailers have is that customer returns can’t be sold as new anymore, which is why most of these products are liquidated. This means the merchandise is sold at prices below wholesale. The fact is that keeping those products costs money and precious storage space, so retailers are motivated to get rid of customer returns, by selling them at severely reduced prices to other businesses specialized in selling this kind of product.

This presents an opportunity for you to get your hands on great products at very low prices if you find a reliable liquidator who stocks them.

Where Can You Buy Customer Returns?

Having a reliable supplier is the most crucial factor for the success of your business. First and foremost, you need a supplier you can trust. This means not only someone who will provide you with the products you need for your business – and not rip you off or scam you; but also a supplier that can have the merchandise delivered to you on time.

Remember that your final customers want quality merchandise, not just cheap products from you. Therefore, you should also make sure you choose a supplier that has high-quality merchandise on offer.  That way you can trust that you are bidding on items your customers will actually be interested in.

However, before bidding on any items there are a few things you need to check. First of all, you need to check what services your liquidator is providing. Next, you need to make sure you understand the condition of the merchandise you are bidding on.

Be aware that products on offer are usually sold in bulk, as wholesale pallets. These might not only include customer returns that are in mint condition, but there also might be some refurbished items in the mix, such as refurbished electronics.

A reputable supplier will provide you with all the data you need about what is included in the pallet you have bought, usually in the form of content manifests. This will allow you to make an informed decision as well as plans on how to sell the merchandise.

Once you have found your preferred supplier, and found the merchandise you are looking to resell, in mint condition and at a price below wholesale, you should hopefully find that all these steps have led to one important thing, a higher profit margin on resale. This means you are still making a healthy income while remaining competitive by standing out from the crowd of online resellers.

Share on social networks

Henley Johnson

Henley currently works as a sales representative for Direct Liquidation, assisting businesses with product sourcing of liquidated merchandise from the largest retailers in the world. Whether you are looking for a pallet or a truckload Henley is here to help you grow your business.

View Henley’s Bio on YouTube.