Where to Buy Pallets of Returned Merchandise

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Buying pallets of returned merchandise and reselling the merchandise can prove profitable.
Buying pallets of returned merchandise and reselling the merchandise can prove profitable. (Image: moodboard/moodboard/Getty Images)

Retail businesses often face the problem of excessive stock, closeouts and customer returns. To avoid a complete loss on these products, retailers can sell the merchandise to wholesalers that pack the products onto pallets and sell them at a discount, or do it themselves and sell directly to buyers. Entrepreneurs take advantage of these pallet sales to acquire inventory for resale online or in a storefront.

Where to Buy

A third party seller often acquires returned merchandise from one or more retailers and then bundles products onto pallets for resale. Sellers typically bundle items by product type, such as men’s T-shirts or TVs, or category, such as furniture or consumer electronics. Numerous third-party pallet sellers operate in the US, but a few higher profile examples include GENCO, Via Trading and American Merchandise Liquidators. Some retail stores sell pallets direct to buyers, but buyers typically must negotiate terms with individual stores or chains.

How It Works

Most return merchandise pallet sellers maintain websites and sell individual pallets or trucks of pallets through an auction process. Buyers need to set up an account, which may include a credit check. After account approval, buyers can bid on pallets or truckloads. Some pallet sellers also provide opportunities to skip bidding and buy immediately. The buyer must make arrangements to either pick up the pallet or get the pallet delivered. For a truckload of pallets, the merchandise sellers may recommend or insist on using a specific company for delivery.

Avoiding Scams

As with any business purchases, due diligence is a key to success with returned merchandise pallets. Legitimate pallet sellers – even online sellers – provide substantive contact information, such as physical addresses, phone numbers and customer service email addresses. Legitimate sellers also offer substantive information about what a given pallet contains, such as the total amount of items and a breakdown of products and prices. In addition to any information provided by the company, resources such as the Federal Trade Commission and the Better Business Bureau offer insight into the legitimacy and track record of businesses.

Considerations

Returned merchandise pallet buyers need to remember that the price of a pallet or truckload only represents the starting cost. The buyer must also account for transportation costs. If the buyer intends to pick up the pallet, they must own or rent a truck that can hold and haul the pallet. A pallet can be larger than 5 feet tall and, depending on the products, weigh several hundred pounds. For pallet delivery, the buyer must expect to pay substantial shipping costs to the trucking company, typically based on the weight. Buyers must also remain aware that some returned merchandise doesn’t function, is damaged or otherwise arrives in a condition where it cannot be sold.

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