Every year, billions of dollars worth of merchandise comes back to stores in the form of returns -- often making the items unsellable because they may not be exactly in original condition: About $260 billion worth, to be exact. About 15% of items purchased online are returned, and 8% of brick and mortar purchases are returned.
But now, this returned merchandise is becoming a big opportunity for retailers -- and shoppers looking for a bargain.
Saving returned merchandise from the landfill
According to the New York Times, a majority of returned items aren't actually resold in stores. After being transferred to liquidators, wholesalers and resellers, much of the undamaged merchandise ends up in landfills. It is estimated that as much as two million tons of returned items are thrown away every year, enough to fill up nearly 200,000 garbage trucks.
Optoro is a company that offers retailers options when it comes to returned merchandise. The company's CEO, Tobin Moore, says, “The way we consume right now isn’t sustainable. We can’t keep throwing stuff away,” he said. “There’s a better way.” That better way, at least for Optoro, is to help returned merchandise transition from traditional retailers to aftermarket liquidators -- instead of the dump.
“For a long time, returns was something retailers didn’t really pay attention to,” said Kevon Hills, VP for research at Stella Service, a company that rates the customer service performance of online retailers. “But it’s such a focus for companies now.”
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Returned electronics get the boot
Though many retailers have opted to have more lenient return policies to increase sales, there are other retailers that have stricter policies, such as electronics stores.
If a new device takes more than 15 minutes for a user to figure out, that item is very likely to be returned, said Moore. But since electronics are part of a category with an extremely limited shelf life, retailers are much more likely to get rid of returned items to make room for the newest products that can claim higher margins.
This means that electronics are very likely to pass from electronics stores to deep discounters -- for a fraction of the item's original price.
Reselling returned merchandise as a merchant
If you want to operate a liquidator business, there may be big opportunity as people continue to bargain shop for goods. There are challenges however.
“To make money in this business it is a volume game. If we can make 10% profit we are jumping up and down,” said Michael Ringelsten, owner of Shorewood Liquidators Inc. He operates a 91-person business and sells truckloads of returned merchandise from retailers including Amazon.com, Groupon, and Home Depot at deeply discounted prices.
Last year, Shorewood Liquidators processed a few million returned items for a total retail value exceeding $100 million.
Where to find returned merchandise at a bargain
So where can you find all this discount merchandise?
According to Moore, most of those goods are sold to pawnshops, dollar stores, flea markets, and other entrepreneurs, so it might be a good idea to search for the term "liquidators" in your local area. But still, other merchandise ends up online.
Optoro has an online e-commerce store called Blinq.com where consumers can purchase returned goods at deep discounts. Amazon also has a special place for open box merchandise at a discount here. In addition, you can find great deals at Best Buy Outlet.
All of these outlets are great ways to get popular consumer items at a fraction of the price.
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