Using Customer Returns for Retail

Many big retailers sell bulk customer returns in a business exclusivity contract to a wholesale supplier that features general merchandise. The main reason for this is that the time and money which it would take for the retailer to sort, repair and resell these items often can be better utilized in other areas of their business. But rather than simply dumping these goods, large department stores set up a business exclusivity contract which allows them to offload these products in bulk to a third party.

 

The wholesale supplier that makes the purchase will do so at rock bottom prices – in fact, bulk customer returns are usually offloaded for as little as five percent of the retail value of the merchandise. That makes it incredibly easy for the wholesale supplier to earn a profit when they on-sell the goods to retailers.

The usual process that occurs after the bulk customer returns have been purchased by the wholesale supplier, is that they will be de-labeled of any identification that can be recognized as being store-specific, or they will be noted as salvage, non store returnable. In the case of clothing, markings will usually appear on the labels, rather than a visible area. For toys, electronics or other products, usually the underside or rear panel will be marked – often adjacent to the product serial number. This process is part of the conditions of the business exclusivity contract secured between the department store and the wholesale supplier and it is intended to ensure that customers cannot re-return items that they have purchased at discount to the originating store for a full refund. It’s a scam which was common a few years ago, and with department stores being ever cautious about losing money through corrupt dealings, this process had negated much of the problems that were occurring.

Once the de-labeling process has been executed, the wholesale supplier is free to on-sell the bulk customer returns as they please. In general, these sorts of items are sold as pallet lots, containing a combination of goods. In some cases where there has been a large sum of returns, a wholesale supplier may opt to separate the pallet loads into categories, but they still will not guarantee the condition of the items that you are purchasing.

It’s good to remember that even when you purchase items that aren’t in perfect condition, it’s often easy to discover buyers for them. In the cases of clothing, you will find that used clothing is very much in demand, particularly babies and children’s clothing, as people look to snag a bargain rather than worrying about a minor fault that may be easily remedied.

Even if you realize that 10-20 percent of the lot that you have purchased is unable to be salvaged, you will still be able to make a great return on your investment from the other products that you have purchased. This is the reason why so many people are gravitating towards bulk customer returns as a method to make some extra money – the trick is to snap them up before your competition!