The Complete Guide to Buying and Reselling Amazon Return Pallets

Amazon processed over $386 billion in sales in 2021 alone. With such an immense volume of orders, return rates inevitably hit significant portions as well. According to a National Retail Federation estimate, the average return rate across all ecommerce ranges from 10-30%. More specifically, Amazon‘s return rate currently sits around 18-35% based on estimates from data analytics firm Brick Meets Click.

Handling such a continuous incoming stream of customer returns through individual resale just isn‘t feasible. So to efficiently liquidate that sizeable merchandise volume, Amazon bundles returned items into categorized pallets sold directly to resellers at steep bulk discounts. With savvy sourcing and organized relisting operations, buying Amazon return pallets can drive major revenues for ambitious entrepreneurs.

This 2600+ word, comprehensive guide explores everything involved in successfully buying and profitably reselling Amazon return pallets. You‘ll gain data-backed insights on pallet content variability, risk analysis, large volume processing strategies, and expected profit projections from an economic perspective. Let‘s dive in.

What Gets Returned to Amazon?

Before assessing the opportunity around reselling Amazon returns, it helps to understand what types of items get sent back most frequently.

According to a national survey of over 1000 consumers by Consumer Reports, the product categories experiencing the highest return rates overall are:

• Footwear – 20% return rate
• Basic Apparel – 16%
• Accessories including handbags – 15%
  -Luxury Beauty items like skincare serums – 13%

With apparel, improper fit issues commonly trigger returns. Beauty products often fail to deliver expected performance or provoke skin reactions.

And since Amazon sells high volumes across all those categories annually, they make up a significant portion of liquidated customer return pallets. That means plenty of clothing, shoes, fashion accessories, makeup products, skincare collections, hair styling tools, perfumes, etc find their way into return stream.

But given Amazon‘s roots and massive selection as an e-tailer, consumer electronics remain the 800-pound gorilla category for returned merchandise volume. Smartphones, tablets, laptops, computer components, gaming gear, home theater systems, smart home devices, small kitchen appliances like air fryers and instant pots, power tools, and toys like RC vehicles and STEM robots are all well-represented.

Niche special-order categories frequent return pallets as well, especially from Amazon Business purchases. Think industrial supplies, medical equipment parts, musical instruments, crafting materials, etc. When customers return higher priced goods purchased for specific applications but no longer needed, Amazon often consolidates them onto mixed general merchandise pallets for resale.

In summary – virtually every category commonly bought on Amazon will appear to some degree within customer return pallets. Part of the sourcing strategy involves targeting pallets with concentrations best suiting your reselling focus, warehouse capabilities, and downstream buyer targets.

Why Buy Amazon Return Pallets?

Given the variable contents and condition inherent to customer returns, why source inventory this way? What are the advantages of buying Amazon return pallets vs acquiring wholesale new product distribution? Consider these factors:

Significant Purchase Discounts

The reason Amazon return pallets deliver such appeal comes down pure value pricing. Because condition and exact contents are uncertain, bulk pallets of customer returns sell at substantial discounts – anywhere from 30% to 70% off the items‘ original retail prices. Some specialty goods like electronics and trending toys can be written off by over 80%.

Such extreme cost savings set the stage for very attractive resale margins once properly sorted, cleaned, photographed, listed, marketed, and shipped out to buyers. Lower acquisition costs directly drive higher profit potential.

Huge, Consistent Volume

Beyond one-off closeout deals, healthy inventory availability represents a huge perk. Amazon pays major third-party liquidators like Bulq and Direct Liquidation handsomely for truckloads of returns. So pallets continually cycle through auction marketplaces in vast numbers.

Smaller sellers hawking just a few “mystery” pallets pop up online constantly as well, eager to pass goods purchased out of speculation. This abundant, renewing supply stays highly affordable thanks to obscure contents and the work required getting items resale ready.

Flipping Trends & Hard-to-Find Specialty Items

When buying return pallets, you gain access to a steady mix of everyday consumer goods alongside intermittent batches of hot niche merchandise less accessible through traditional wholesale channels.

Getting early visibility on high demand toys, cutting edge gadgets and gizmos, hobby equipment, etc before popularity truly spikes can mean strong sales and stellar margins. Likewise for specialized industrial and commercial equipment where supply limitations allow for strategic value-based pricing.

Risks & Rewards Buying Amazon Return Pallets

Assessing the pros and cons of buying Amazon customer return pallets will help determine if taking the inventory sourcing path makes solid business sense. Generally smaller operations able to apply hands-on care reselling units individually via Fulfilled by Amazon (FBA) or eBay can thrive. Service-intensive preparation and one-off value pricing models best accommodate condition variability.

Let‘s examine potential advantages against possible drawbacks:

On the whole, return pallets offer compelling advantages around discounted merchandise access supporting solid profits if operational processes meet handling requirements. Just plan to invest in tools, space, and systems supporting efficient volume throughput.

Step-by-Step Guide to Buying Amazon Return Pallets

If prepared to implement the infrastructure and effort needed unlocking the inherent value inside liquidated Amazon return pallets, here is a detailed step-by-step overview of how to source safely for profit:

Step 1. Find Reputable Pallet Sellers

Vet any potential pallet vendor thoroughly checking:

• Online seller ratings/reviews
• Customer support responsiveness
• Evidence of direct relationships getting pallets from Amazon
• Speed shipping pallets after purchase
• Return policy leniency for condition disagreements
• Availability of manifests listing pallet contents

Tip: Liquidation pros like Bulq pre-inspect truckloads using RFID then compile manifest accuracy exceeding 95%.

Ideal credentials validating legitimate sources include:

• High TrustPilot or Google ratings
• Customer testimonials praising fairness
• Upload warehouse rotation videos displaying pallet inventory
• Longtime A+BBB accreditation status
• Advertise official credit terms direct with Amazon

Step 2: Inspect Manifests & Look For Standout Goods

Thoroughly analyze posted manifest documentation detailing items, MSRPs, conditions, and product categories manifests represent. Gauge purchase quality based on:

• Promise: Do manifest product categories and pre-return MSRP estimates seem accurate?
• Profit: Will projected 30-50% quick sale discounts still yield positive margins given the pallet discount?
• Purpose: Does the pallet merge reasonable concentrations of products suiting your focus?

Isolating pallets blending some specialty electronics, toys, or niche hobby goods alongside everyday essentials tends to optimize ROI. High price outliers lift overall margin potential.

Step 3. Arrange Logistics

Before ever placing a first pallet order, prep key logistics:

Procure storage space able to handle palletized boxes both bulk stored and individually processed. Expect to support 200-2000+ unique SKUs simultaneously.

Inventory system capable of reconciling items received against manifest documenting product details, valuation, conditions, storage locations.

Transportation for deliveries via pallet jack, lifting equipment, box trucks, etc.

Workflow stations to efficiently open, inspect, test, photograph, clean, polybag, label, and shelving items continually as pallets empty.

Step 4. Start Small, Then Scale Cautiously

When ready buying that inaugural pallet, consider sampling a “mini” first holding just 50-200 items to trial processes without overextending resources. Exercise inspection, processing, listing, selling, and shipping items in small batches while documenting results before expanding.

This approach allows developing infrastructure, hiring staff, reinvesting revenue into larger storage spaces, commercial equipment, custom packaging materials, etc supporting added capacity as operational knowledge solidifies.

Jumping straight into buying a 40ft trailer worth of return pallets without a blueprint rarely ends well for newcomers. Walk before attempting to run at volume.

What Sells Best from Return Pallets?

Wondering what categories bring strong sales velocity and margins when reselling Amazon return items? Here are some of the most consistent online arbitrage opportunity items:

With the glut of markdown merchandise constantly returning through Amazon, expect considerable diversity. But those categories make regular appearances while generating solid to stellar profit margins when appropriately evaluated and promoted.

Realistic Profit Projections Buying Return Pallets

Wondering what kind of revenue buying and reselling return pallets can reasonably produce after operational expenses? Profitability ultimately depends on your workload bandwidth, dedicated storage space, processing throughput, business relationships, and selling channels leveraged.

But here is a sensible baseline estimate:

Total Expenses: $2400 + $150 + $100 + $1200 + $80 + $150 + $300 = $4380
Total Profits: $6300 – $4380 = $1920

ROI %: ($1920/$4380 Costs) = 44% Return on Investment

So even with a casual 20 hour weekly effort, a single pallet holding just 300-500 units at attractive margins yields nearly $2000. Scale up the model, revenue compounds rapidly while operational costs grow slower over each extra pallet to improve efficiency.

Deeper discounts from bulk purchases, faster processing with commercial tools, and expanded storage compounds marketable inventory. Higher volumes through FBA distribution and sponsored product ads inevitably maximize profits over time. But aim for steady, sustainable growth instead of rapid overextension.

Key Considerations When Buying Amazon Return Pallets

While return pallets provide a unique inventory arbitrage option, unique considerations apply to control risk and handle product variability:

Inspect Thoroughly

Upon taking delivery, take time fully unload and inventory pallet contents against the accompanying manifest before approving payment. Check for:

• Missing claimed electronics & high value specialty items
• Damage beyond disclosed condition grades
• Hazardous unsalable merchandise requiring disposal

Document discrepancies thoroughly capturing photographic and video evidence where helpful. Significant inconsistencies may qualify you for partial refunds depending on return policy terms.

Research Recalls

Electronics and applicances sometimes get recalled after past distribution upon new hazard discoveries. Before processing inventory, carefully check each ASIN against Amazon‘s databases to ensure nothing received presents safety issues. Recalled items require special discard handling without resale.

Understand Restricted Products

Amazon prohibits reselling certain categories like weapons, ammunition, alcohol, medication, automotive brake parts, tires, helmets, car seats baby cribs and strollers where usage conditions can’t be confirmed. Ensure pallets avoid restricted items through prescreening.

Accurately Detail Condition

To build buyer trust (and avoid forced returns), your listings must represent cosmetic flaws, missing accessories, and functional defects accurately. Call out imperfections clearly while testing devices before advertising as “Used – Good working condition”.

Scale Operations Gradually

Start small while refining workflow processes before ramping up volumes. Jumping into buying full trailers worth of pallets without solid resale processes in place typically yields debt not profit. Minimize risk by making minor investments until systems mature.

Mastering the operational requirements processing diverse liquidated goods efficiently separates successful resellers from overwhelmed novice buyers. Patience and organizational discipline equals profits.

Tips For Reselling Return Pallets

Once you‘ve refined pallet inspection and inventory intake workflows, shift focus to listings and sales channel optimization:

Promote High Waterfall Items Aggressively

Waterfall listings refer to in-demand products producing sustained sales at desirable margins across multiple online marketplaces and platforms. Give hot products like electronics, video games, and trending toys preferential handling and aggressive pricing.

Discount & Bundle Slow Movers

Group less popular items around themes for inclusion into discounted variety packs, ensuring some proportional value for the bundle. Themed variety listing perform better than generic assortments.

Sell Local To Reduce Fees

Facebook Marketplace and Craigslist allow buyers to pickup bulky items saving shipping costs. Price competitively but avoid sacrificing reasonable margins.

Milk eBay Category Specific Promos

Keep tabs on seasonal sales events and timed promotions across top eBay categories like electronics, fashion, and toys to qualify more listings for temporary discounts attracting sales spikes.

Develop Preorder Interest for Future Pallets

Once established, share sneak peeks into upcoming recently secured pallet manifests taking preorders from buyer lists segment by specialty interests like golf equipment and sneakerheads hungry for exclusives.

Final Thoughts on Buying Amazon Return Pallets

The renewable supply of diverse inventory at irresistible bulk rates makes Amazon return pallets a compelling opportunity. Just ensure operational capacity stays ahead of projected pallet intake. Careful processing and individually focused sales channels help smooth variable conditions into consistent revenue. With realistic expectations and intentional business development, profits await motivated resellers.