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Where Amazon Returns Go to Be Resold by Hustlers
https://www.theatlantic.com/technology/archive/2019/01/where-amazon-returns-go-to-be-resold-by-hustlers/580363/+
“We entered the multi-million dollar business behind your Amazon returns”
https://finance.yahoo.com/news/entered-multi-million-dollar-business-behind-amazon-returns-223211498.html -
I looked into liquidation.com a few months ago for electronics and couldn’t make the math work for most of the auctions. I live close to one of the warehouses, so this was without shipping.
The prices mentioned in the manifest are obviously based on Amazon listings which are usually a solid xx% higher than eBay. In the worst cases, retail price was a few hundred dollars greater than eBay solds. To make it more complicated, I had a hard time finding items that weren’t sold with the expectation of free shipping, so unless you know exactly what you’re looking at, it’s a lot of time spent researching and figuring out the margins w/ shipping included. A spreadsheet is mandatory, lol
Lots are also very front-loaded, like 2 Dymo label printers, some gaming headsets, then 50 phone cases. Since you don’t know the condition of anything, you’re pretty much gambling on the good stuff making the investment worth it. Given the difference in retail/list price, the low end items end up being $5 + free shipping in a sea of other sellers with the exact same product.
This is pretty common for auctions involving electronics, though. A lot of the bidding I do on state surplus sites end up getting really competitive and pricey on stuff that has no guarantee to be in working condition. You either get a big payoff or barely break even, but that’s the fun part IMO.
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I got into a long drawn-out discussion yesterday about why I sold a “Warners Safe Cure” bottle for £1 more than I paid for it (I made a mistake in buying it).
Now I have the Knoblock Rule to quote:
“Speed through your inventory; don’t squeeze it for every dollar”
(Walter Blake Knoblock’s video is linked in the “Atlantic” article)
I don’t think I’m going to try it, though. Knowing my luck, I’d end up with a pallet-full of knob locks without their keys.
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I bumped into my first returns auction about two years ago. The auction was run by an auction company that’s been in business for decades in the brick and mortar world. The returns auctions are done online.
They don’t ship. I live about 3 hours away from their physical location. Also, they don’t do pallets, which is better. Each individual item is photographed and described. To me, buying pallets is like buying a lottery ticket or mystery prize. No thank you.
I’m in Canada but I think the US has maxsold.com which I started using occasionally a few years ago. I’m sure you’ll be able to find traditional auction houses in your region who have moved online and do regular online returns auctions.
I did well on my first auction. Prices were comfortably low for reselling. I bought a bunch of high end shoes and boots from established brands. I was wary of buying any small appliances or electronics that might have been returned because they didn’t work.
The shoes and boots sold well on eBay with the average price close to $200 and I paid no more than $50 for any pair. If I remember correctly, I bought ten or twelve pairs and sold all of them within a year with most selling in the first 6 months.
I’m an eBay guy who also does a lot of local selling too.
Amazon selling is not for me but these auctions would be great for that.
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Jay, my favourite returns place does two or three returns auctions per month, every month. They are 3 hours away so I need to buy enough items to justify the gas and/or truck rental.
It occurs to me that my place is pretty close to an Amazon warehouse. That might be a key factor in finding a good one.
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Check out “Franchise Kicks” on YouTube if you want to see the kinds of loads you get from Amazon returns. It looks rough for the most part. Some good stuff, but mostly low dollar and destroyed crap. It looks like really tight margins, if any. A lot of the things he gets he has to sell in his second hand shop because they are low dollar items that you can’t even get the cost of shipping on Ebay.
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From all the online auctions of Amazon Returns Ive seen, the market is well known and competitive. The good pallets dont go cheap. The affordable pallets are the junk like you mention.
The profit is made up in bulk sales. Its a lot of work listing and describing items with flaws.
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It’s funny seeing (or hearing) Jay use the word “hustler(s)”. I know how much he dislikes it. And so do I.
The pallet return lots seem way too expensive to make it worth the time and effort. Not only have I seen plenty of Amazon returns “haul” videos on YouTube, but I worked for an auctioneer friend years back. One of the things I did for him was go through the semi truck loads of WalMart / Target / Sears general merchandise returns and shelf pulls he was buying. He’d buy 10-30 pallets at a time to get the best price.
Yes, there was value in the stuff. But it was so heavily skewed towards things like HBA (health & beauty aids), low dollar toys, office/school supplies, broken rice cookers, low end DVD players, toilet paper, granola bars and misc. crap that it was really hard to make profit. How do you sell inexpensive commodity items for even close to their actual value at an auction, where you’re forced to lot everything up? In a pawn shop, where people want things dirt cheap? Or even online, where shipping prices you out of the market?
And a huge percentage of the electronics needed repair and were either too time consuming or the parts were unavailable/too expensive (I was an electronics repair tech for most of my working life).
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There’s obviously profit to be made, but its a business I dont understand. From what I gather, it takes a lot of money to invest in the inventory, then margins are overall pretty slim. But its a business of volume which means you need a smooth running infrastructure to process enough returns to make money.
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