What to buy customer returns or shelf pulls?

Do you like to gamble, I do. It can be very exciting. My game of choice is roulette. I love sitting at the table with a pre-determined amount of money I have decided I can “gamble” with. I get caught up in the conversation with other players and, of course a few drinks. If my numbers come up I am ecstatic! More often than not I end up walking away from the table with less than I arrived at the casino with. You cannot win every time.

How much money can you gamble with in your business? Are you just getting your business started on eBay or at the flea market? Do you have big hopes of turning a small, part-time venture into a large income?

“How the heck are you going to tie this into a blog post?”

Here we go: buying customer returns can be a large gamble; especially the next day when you wake up hung over from the glitz and glamor.

I had someone email and ask me why I recommended they stay away from buying customer returns. This particular individual is thinking of buying a load of liquidated merchandise from a high end department store, which offers below wholesale merchandise in two categories:

Shelf pulls- Merchandise that was pulled from the retailer’s shelf. Often considered new with tags (MWT). Great for eBay resellers with minimal damages.

Customer returns- Merchandise that was returned to the store for various reasons. Damages can range from a low of 8% to upwards of 30-40% of the pallet or truckload.

In this situation I explained that the difference in price between the shelf pulls versus returns does not equate to a very smart gamble for the new entrepreneur. This liquidation contact [she was asking about] sells several categories of merchandise including pallets separated by category:

Domestics
Children’s apparel & accessories
Women’s designer wear
Socks / Hosiery
Women’s Dresses suits and coats
Housewares
Table Top Gifts
Intimate apparel
Luggage
Men’s Dress apparel
Men’s Dresses and suits

For the most part each category available can be purchased with the designation of shelf pull or customer returned condition. The variance in pricing might be a few percentage points less for returns, but you must remember that with returns you will receive damaged items. How much damage / risk? This is like the walk up to the roulette or blackjack table…..you never know what you are going to walk away with.

I like buying returns, but I do not buy them when shelf pull and overstock is available from the liquidator. I pay a few extra dollars to insure the merchandise I receive is ready to resell. Some liquidators only offer returns and there are some stores that do not separate the raw returns from the shelf pull and overstock.

If you have the option, take the safe bet. If you are new to buying pallets and truckloads stick with shelf pulls and overstocks before you jump into the returns.

This is my opinion, but it comes from years of buying pallets and truckloads. Think of it this way: rather than jumping in the pool when you know it is cold…ease in. Eventually you will get used to the water.