Hey there! Are you considering buying Amazon return pallets this year to score inventory for your business? With the rapid growth of ecommerce, more packages than ever are getting sent back—creating huge opportunities for resellers like you and me.
In this detailed guide, I‘ll walk you through everything I‘ve learned about sourcing, buying, receiving, processing, and reselling Amazon return pallets. You‘ll understand exactly what‘s entailed so you can decide if buying returns is the right move for your business in 2022.
Here‘s what we‘ll cover:
- Key stats on the size of the Amazon returns market
- Where Amazon returns ultimately go
- Pros and cons of buying Amazon pallets
- What return pallet conditions really mean
- How to buy pallets from various sources
- Expected costs for different pallet types
- Steps for processing and reselling the products
- Tips to make buying returns worthwhile
Let‘s dive in!
The Sheer Size of the Amazon Returns Market
To understand the Amazon returns opportunity, you need to grasp the massive scale of Amazon‘s retail dominance. Check out these stats:
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$386 billion in sales revenue in 2019 – Amazon sells more than Walmart, eBay, Apple, and Target combined.
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Over 5 billion Amazon Prime packages shipped globally per year.
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Up to 30% of Amazon‘s sales result in returns – far higher than brick-and-mortar retailer return rates.
With hundreds of millions of packages being returned to Amazon annually, you can see why reselling pallets of these goods is big business!
Now let‘s look at where all those returns ultimately wind up…
Where Do Amazon Returns Go From Here?
Once an item is returned to Amazon, there are a few potential outcomes based on its condition:
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Resold as "Used" – If the item is gently used but still working, Amazon will relist it as a Warehouse Deal or Amazon Renewed product. About 60% of returns fall into this category.
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Liquidated – Returns that are defective, damaged, or unsellable get liquidated in bulk. Around 25% of returns.
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Recycled – If the item is broken or hazardous, Amazon disposes of it through recycling programs. About 15% of returns.
As you can see, only a fraction of Amazon‘s returns get liquidated in bulk. That‘s why buying a pallet of these goods allows you to acquire inventory most sellers can‘t access.
Next let‘s weigh the pros and cons…
The Pros and Cons of Buying Amazon Return Pallets
Return pallets offer major advantages but also come with risks you need to mitigate. Here are the biggest pros and cons:
Pros
- Acquire discounted inventory at 50-90% off retail value
- Source products you normally couldn‘t buy wholesale
- Resell pallets for 2-5X your purchase price
- Gain experience with high-volume arbitrage selling
- Potentially huge profit margins if you sell well
Cons
- Upfront costs – $500-$5,000+ per pallet
- Need manpower to break down and process pallets
- Storage space required for pallet breakdown
- Items may require cleaning or repair
- Reselling takes significant time and effort
- Some items won‘t be flippable
If you‘re willing to put in work processing the pallets and reselling products, the high profit potential outweighs the effort and risks involved.
Now let‘s look at what condition you can expect…
Decoding the Condition of Return Pallets
Pallet condition encompasses a wide spectrum:
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New – Brand new, untouched items. Around 20% of a typical pallet.
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Like New – Open box items, tested but unused. Around 30% of units.
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Used – Display signs of use but still work. About 35% of inventory.
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Damaged – Broken items needing repair. Around 10% usually.
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Expired – Perishable goods past expiration. Make up 5% or less.
Higher priced pallets tend to have more New and Like New items. Cheaper pallets contain more Used and Damaged goods.
Expect to put in work cleaning, inspecting, testing, and repairing products – but this results in bigger profit margins.
Next let‘s explore your buying options…
Where To Buy Amazon Return Pallets
You‘ve got three main options for sourcing return pallets:
Liquidation Platforms
Pros:
- Huge selection of Amazon pallets
- New inventory daily
- Ship pallets directly to you
Cons:
- Prices driven up by demand
- High buyer fees
Examples: Liquidation.com, DirectLiquidation.com
Auction Sites
Pros:
- Bid pricing gets best deals
- Tap into local auction sources
Cons:
- Less selection and unpredictability
- Must pickup pallets yourself
Examples: PublicSurplus.com, Webstore.com, local auctions
Direct From Amazon
Pros:
- Buy straight from the source
- Get massive volumes
Cons:
- Nearly impossible for small buyers
- Requires existing business ties
For most starting out, liquidation platforms represent the easiest method to get started and source pallets reliably.
As you scale up, exploring auction houses and direct Amazon purchasing become viable ways to get better pricing and volume.
Now let‘s look at what these pallets will cost you…
What‘s the Cost of Amazon Return Pallets?
Return pallet pricing fluctuates based on multiple factors:
Pallet Size
| Pallet Size | Typical Cost Range |
|---|---|
| Small (25-50 units) | $200-$700 |
| Medium (50-100 units) | $500-$1,500 |
| Large (100-300 units) | $1,000-$3,000 |
| X-Large (300-500 units) | $2,000-$5,000+ |
Pallet Condition Ratio
| New/Like New Ratio | Typical Cost Range |
|---|---|
| 0-20% | $100-$600 |
| 20-50% | $500-$1,500 |
| 50-80% | $1,000-$3,000 |
| 80-100% | $2,000-$5,000+ |
Product Categories
| Category | Typical Cost Range |
|---|---|
| Toys/Games | $500-$1,000 |
| Books/Music | $200-$700 |
| Clothing | $800-$2,000 |
| Electronics | $1,000-$3,000 |
| Tools/Hardware | $1,500-$4,000 |
| High-End Goods | $2,000-$5,000+ |
Start small with cheaper mixed pallet to get experience. Then move up to bigger, more valuable pallets once you have a solid reselling process in place.
Be sure to account for all fees, commissions, and shipping costs too – which can add $200-$800 to your total pallet price.
Next let‘s look at the types of products you‘ll find…
The Many Product Categories Found in Amazon Pallets
One of the best parts of buying Amazon return pallets is the incredible variety of products you receive. Almost anything sold on Amazon could be bundled into a return pallet.
Some of the most common product categories include:
- Books – Fiction, non-fiction, textbooks, kids books
- Toys – Fidget toys, board games, building sets
- Kitchen – Appliances, cookware, utensils
- Electronics – Speakers, laptops, cameras, smart home
- Clothing – Apparel, shoes, accessories
- Beauty – Makeup, skincare, hair products
- Sports – Equipment, accessories, workout gear
- Home – Furniture, decor, office supplies
- Auto – Car electronics, tools, parts
The diversity allows you to cost-effectively test and experiment with new product niches. You may uncover hugely profitable items you‘d never think to source otherwise.
Now let‘s walk through the full process…
Step-By-Step: Buying, Receiving & Processing Pallets
Here are the typical steps involved in acquiring and handling Amazon return pallets:
1. Choose Products to Focus On
Pick 1-3 product categories to start with based on your interests, expertise, and resale outlets.
2. Find Pallets Aligned With Your Categories
Browse pallet auction and marketplace sites filtering on your target product categories. Compare pallet details, units, and price.
3. Place Your Order
Buy the pallet! Arrange shipping details and factor in all transportation costs.
4. Receive and Breakdown the Pallet
Use pallet jacks, box cutters, and helpers to safely break down the pallet and sort units.
5. Inspect and Test Units
Closely inspect each item, assess its condition, plug in electronics, and verify products work as intended.
6. Research Products Values
Look up each product online to estimate its resale value on Amazon, eBay, Craigslist, or at your store.
7. Clean/Repair/Photograph Units
Clean off any dirt/dust, make minor repairs if needed, and take photos of each item.
8. List Items For Resale
Create listings with details, photos, pricing and ship out units once sold!
This process takes serious time and effort. But it‘s how you maximize the value of your pallet purchases.
Is Buying Amazon Returns Worth It In 2022?
At the end of the day, is investing in Amazon return pallets a smart move for your business right now?
While not a fit for every seller, buying returns can absolutely be a highly rewarding and profitable endeavor if:
- You enjoy arbitrage selling and finding deals
- You want to rapidly grow your inventory
- You have time to process and resell pallets
- You have storage space available
- You have a plan to profit from liquidated goods
With the right expectations and preparation, you can absolutely crush it buying and reselling Amazon returns this year.
Tips To Make Buying Amazon Pallets Worthwhile
Here are my top tips to ensure success and maximize profits:
– Start small – Don‘t risk huge money upfront. Test 1-2 small mixed pallets first.
– Specialize your focus – Stick to reselling products you already know well.
– Get help – Have friends help breakdown and process pallets to save time.
– Work the margins – Buy low, invest sweat equity, and sell high.
– Reuse and recycle – Be creative repurposing items if they won‘t resell.
– Track data – Use software to monitor your costs, inventory, and resale margins.
– Storage is key – Have an organized space to breakdown and store volume.
– Keep iterating – Continually reinvest profits into larger, more profitable pallets.
Ready to Start Scoring Inventory Buying Amazon Returns?
Thanks for reading this overview of how to buy and resell Amazon return pallets in 2022! I hope you now feel prepared to start sourcing and profiting from liquidated Amazon inventory.
Although it takes work, this is one of the most powerful ways I‘ve found to inexpensively grow my inventory – especially with high value products I could rarely source otherwise.
If you approach buying Amazon pallets strategically and diligently work the margins, this can transform your business (and your bottom line) this year!
Let me know if you have any other questions. I‘m always happy to help a fellow reseller succeed.
Good luck scoring some killer deals!
