Last Friday the truck rolled into our warehouse filled with a load of customer returns we purchased from Genco. We typically order 12 pallets at a time and this load consisted of the category Hardware(9 pallets) and Blinds (3 pallets).

The load arrived at about 8:45 in the morning and I had it unloaded and positioned in the warehouse in about 30-40 minutes. I signed the BOL and the freight company (Oak Harbor) was heading back to their terminal.

Depending on how we plan to market the merchandise we purchase (ebay or retail sales) we will position the load so that we can inventory all items which we receive. We do this by spacing the pallets and placing folding tables in the warehouse so we can quickly examine the pallet contents and organize a plan for resell.

With all returns we do find a portion of all loads which must be disposed of so we also roll our dumpster in between the tables and pallets to make it easier. When buying customer returns you will find broken items which cannot be repaired including broken glass and smashed items. We quickly throw this stuff away.

We examine all pallet contents and make two piles:

1. Items that are in good resalable condition
2. Items that are broken and/or missing pieces

Some items we received in this load were large and cumbersome, such as two dishwashers and three cooktop stoves. We do not resell large appliances like this so the first thing we do is call our appliance guy, Scott, and advise him that we have a few items which need to be picked up. When we started buying this particular category of merchandise (Hardware) we called several appliances repair guys in our local area and allowed them to bid on buying all the appliances that we would receive, ongoing. It was sort of an agreement between us and the prospective repairman.

We wanted someone who would:

1. Purchase all appliances we did not want
2. Agree up front on pricing
3. Respond quickly when we needed this merchandise moved out of our warehouse

Scott arrived at about 2:30 on Friday and quickly loaded the appliances in his truck and wrote us a check. This is an example of the “creativity” needed to resell customer returned merchandise. It is imperative that you establish a procedure for “moving” or “selling” any items which you might not be able to market.

After the Big and Bulky Items are taken care of:

We next go back to our pile of damaged and broken merchandise with the intent to look for duplication of items. For example, if you receive 3 sets of dishes you may be able to combine two broken sets into one complete set. The theory here would be a “complete” set is worth more than two incomplete sets.

If you have never purchased multiple pallets of customer returns you should understand that you will receive duplicate items.  While examining the multiples you should thoroughly examine what pieces are missing and then match up broken sets.

Purchasing missing or damaged replacement parts:

We have had great success in ordering missing pieces direct from a products’ manufacturer. One example would be the great number of outdoor storage products we continuously receive in our pallets. I am specifically talking about upright plastic tools sheds. The sheds are meant to house gardening supplies including shovels, rakes and other various implements. Each shed comes unassembled in large boxes. Often the shed kits will be missing a side or maybe a hinge and cannot be assembled. In this circumstance we would simply re-order specific parts (from the instruction manual) at very reasonable pricing. Often, a manufacturer will ship a replacement part to you at no charge!

What about selling broken and/or damaged merchandise “As Is”?

Just because an item you receive is damaged or missing a piece do not mistake the fact that it does not have value. We receive tool sets all the time, which are missing a wrench or two. Sometimes these sets are missing multiple pieces, but we have no trouble at all when we go to resell. If the original tool set advertises “205 PC tool set”, you simply re-word it to “199 Piece”-

A note on damaged and broken items:

Inevitably, there are items which must be thrown away when processing pallets of customer returns. make sure you have sufficient means to dispose of broken glass, damaged packaging and salvage. We maintain a large garbage bin at our warehouse for such items. We have, in the past, had to make dump runs using our pickup truck when the garbage becomes overfull. The cost associated with throwing away damaged items must be factored into your pricing as this affects your bottom line profit margin.

Conclusion:

Purchasing and reselling customer returns takes creativity and lots of hard work. There is a lot of profit to be made reselling and working with customer returned merchandise, but you must be willing to get dirty and work hard!