What happens when a customer returns an item to a retailer? In many instances, you get a new opportunity as a reseller.
Last year, U.S. consumers returned approximately $260 billion worth of merchandise, according to the National Retail Federation. Often, these items are returned only due to buyer’s remorse. Shoppers might be enticed by the latest tablet release or splurge on a pair of pricey pumps. Not long after these purchases, many consumers begin to question whether they really have a need for such products. Customers are further incentivized by lax retailer return policies to simply send their goods back to the store. These items are often times in perfectly good condition, and can in turn be bought for a heavy discount.
Peak season for sourcing returned inventory is right after the holidays, but don’t be fooled–retailers are sending returns into liquidation all year around.
Here are our tips for how to best understand, source, and sell customer returns successfully.
Types of Customer Returns
Not all customer returns are equal. Each type comes with a different level of risk involved. In the wholesale space, these are the three main classifications of customer returns:
Liquidation suppliers will sometimes acquire inventory without inspecting or testing it, price it low, and sell it as an uninspected return. When you buy uninspected returns, you may strike gold and get high-quality, retail-ready items or you could end up with items that still need refurbishing. Whether investing in this type of customer returns is right for your business depends on your risk tolerance and your ability to refurbish or find buyers for non-new items.
This category of customer returns are not simply flipped by the liquidator. The wholesaler will inspect the appearance and packaging of the item, but will not test its functionality. These customer returns carry less risk, but will cost more because of this.
Inspected and Tested Returns
In this case, the supplier both inspects the appearance and tests the functionality of a customer-returned item before selling it. This category of customer returns is the least risky and the most costly, which will affect your potential return on investment.
Sourcing Customer Returns
The best and most cost-effective place to find customer returns is on the wholesale market. You are able to get a large volume of products at discounted prices. Depending on your business needs, you can tailor your search based on category type, condition, or price.
While brick-and-mortar shops can sometimes offer opportunities for sourcing customer returns, don’t limit your options. Consider sourcing online as well; BULQ.com is one great solution for sourcing uninspected returns.
Selling Returned Products
Once you’ve found the right sourcing fit for your small business, it’s time to start thinking through the best selling solution. It’s always useful to cast your net wide at first and consider multiple sales channels. While selling via Amazon FBA or eBay might be obvious choices for most small business owners, it’s also worth considering other selling opportunities like Craigslist or local flea markets. Determine what your ultimate selling objectives are and then weigh the pros and cons associated with each marketplace.
After pinning down the best fit selling channels, it’s time to start selling! No need to reinvent the wheel – if you’ve already established a presence in the D2C space, take advantage of your previous experiences and leverage those skills to sell returned inventory as well. For resellers who are new to the space, do your research ahead of time to develop your own trusted brand.
Are you ready to start taking advantage of customer returns? At BULQ, we help our customers source smaller and sell better by offering multiple conditions and categories of wholesale inventory, as well as accompanying manifests with guaranteed 98% accuracy. Check out BULQ’s newly added lots to find the inventory that matches your needs and start growing your business today!