Ever wondered what happens when you return items to Amazon? You get refunded, of course, but what does Amazon do with the items?
In some cases, Amazon will return the item to the seller, who tries to resell it at market value. But when the seller doesn't want the item returned, Amazon will typically box it with hundreds of other unwanted returns, shrink-wrap it with other boxes, and sell the bulk as a liquidation pallet to entrepreneuring buyers.
That's right, anyone can buy these pallets from Amazon. They can be dirt cheap -- sometimes as low as $200 -- but you don't know what's inside. You could get a pallet of resaleable office chairs. Or defective electronics and used clothes.
Some people have been making some serious cash reselling items they find inside liquidation pallets. But can anyone make money and if so -- how much?
What are liquidation pallets?
Also called "return pallets," liquidation pallets are boxes of general merchandise that Amazon wants to liquidate quickly.
The pallets are typically sold at online auctions, though you can also buy them at a flat rate from warehouses. Some start as low as $200 to $800, while others will go for $8,000 to $13,000.
Typically, the higher the price, the more pallets you get. For instance, a truckload of pallets, which consists of 12 to 24 individually shrink-wrapped pallets, can start for a few thousand dollars. A single pallet, on the other hand, may sell for a few hundred dollars.
How can you make money from Amazon pallets?
Like any side gig, you'll need to hustle if you want to make money on Amazon pallets. In general, here's what it involves.
1. Buy your pallets
The cheapest way to buy pallets is to find a liquidation warehouse. These warehouses store pallets and sell them directly for pickup.
A liquidation warehouse helps you save on shipping costs, which can be almost as much as the pallet itself. It also allows you to look at the boxes that comprise the pallets. Sometimes, you can see what items are inside simply by looking at the brands and descriptions on the boxes.
If you don't have a warehouse near you, you can bid on Amazon pallets through the website, B-stock. Although Amazon only auctions its pallets through B-stock, you might be able to find similar pallets on other liquidation websites, such as BULQ and Liquidation.com.
2. Appraise your items
Most boxes will have hundreds of items, but they won't all be in the same condition. You might get brand new and gently used items. Or you could get items that are defective, broken, or missing parts and accessories.
For lightly used items, you can typically recoup about 50% to 60% of their market value. For items that are defective, you could fix them yourself or break them down into parts and sell those individually.
As far as figuring out the market value of an item, just use Amazon. Discount the item at 50% to 60% of whatever Amazon is selling it for. That should be enough to help you recoup the cost of the pallet, plus a little extra for profit.
3. Resell
Once you've sorted your goods, you'll have to pick a place to sell them.
For big items in high demand, Facebook Marketplace and Craigslist will likely be your best options. Both of these platforms have low fees and can help you save on shipping costs by marketing to buyers within your area.
If you can't sell goods for a decent price on these sites, you'll have to use a fee-based service like eBay to liquidate your stuff quickly. You could also resell products on Amazon -- the irony, right? -- though you'll have to pay an 8% to 15% referral fee.
Keep in mind: If you earn more than $400 in pallet flipping, you'll need to pay taxes. You can set this money aside in a high-yield savings account until it's time to pay.
This seems like a lot of work. How much can you really make reselling pallets?
At the very least, you can recoup the cost of the pallet itself. But if your pallet has good items, you might be able to flip them for 100% to 200% more than what you paid for.
Even so, don't expect to get rich from pallet flipping. This is side hustle-worthy, but it likely won't generate enough profit for you to quit your day job.
Should you start flipping Amazon pallets?
Buying and reselling pallets is ideal for people who own a truck and can pick up pallets directly from warehouses. You should also be okay spending 10 to 15 hours weekly on your feet sorting goods and cataloging them online. But if that sounds like too much work, you might want to pick a side hustle that's a bit more passive.
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