Should I risk buying customer returned merchandise lots? Or stick to Overstock and Closeout lots? – The Pros and Cons of working with Customer Returns Wholesale Merchandise lots

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Undoubtingly there are benefits to purchasing wholesale merchandise in customer returns condition, but as any decision, if you expect to have a good outcome reselling the merchandise you must first compare the pros and cons and make sure the pros outweigh the cons. For many, working with customer returned merchandise has been a successful business, but this may not be the case for others, as working with such merchandise has its risks, and requires a well planned strategy.

In the wholesale liquidation industry it is understood that merchandise lots offered in customer returns condition will include a small percentage of items with imperfections. The imperfections can vary tremendously from a blemish, to a stuck zipper, missing part etc… Also, the percentages of items with imperfections vary not only from department store to department store, but by each single lot. In general, wholesale lots in customer returns condition usually consist of 60-80% of items in good condition, and 20-40% of items may have some kind of imperfection.

People who work with merchandise and clothing lots in customer returns condition usually have come up with different strategies to resell this merchandise. Some of them export the customer returns lots to other countries, many times to countries where if any items need to be repaired the labor cost will be minimal. Other buyers of customer returned merchandise have the resources to repair many of these items, further lowering their costs, and growing their profit margins. There are also some people who separate the merchandise they acquire in customer returns condition, and sell items that may not be in perfect condition in different locations using different pricing/selling strategies.

Even though there are risks, there are also benefits when working with customer returned wholesale lots. A great benefit of merchandise lots in customer returns condition is that it is usually available at lower prices compared to shelf pulls and closeout lots. Additionally, it sometimes happens that customer returns lots have larger quantities of items from more desirable and well known brands, compared to lots of the same category offered in closeouts condition. Also, many department stores mix perfectly good overstock and closeout items into customer returns lots. Because of this, there are many occasions in the wholesale industry that merchandise from certain distributors and department stores, or certain merchandise lots/categories are only offered in customer returns condition.

To sum it up, if you come up with a good strategy for reselling customer returned merchandise, and put in the necessary work, you can always count on a constant merchandise supply, and there is a good profit to be made in this business. But, before you begin working with customer returns merchandise please ask yourself the following questions:

  • Where will these items be sold?
  • Who will these products be sold to?
  • Will customers accept to purchase items with minor imperfections (even if they are offered at lower prices)?
  • And lastly, if necessary, are you willing to put in extra work to repair some of the items you purchased, or do you want them all to be retail ready?

If you answered these questions understand the risks and work it takes to sell customer returns wholesale merchandise lots, and are interested in obtaining wholesale designer merchandise in customer returns condition, we can help by supplying you constantly with this merchandise. Don’t hesitate to contact us if you have additional questions, or would like to begin ordering wholesale designer clothing and merchandise in customer returns condition.

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