| Have you considered buying store returns? | | | | Assuming the wholesale value is half the retail value, |
| Every wholesale buyer eventually comes across | | | | there are times when you can buy $5,000 worth of |
| offers for store return merchandise. | | | | retail merchandise for as little as $250. |
| It's a difficult decision wether should someone get | | | | But before you decide to stock your business with |
| involved with store returns. | | | | store returns you need to realize the following. |
| While the profit potential is definitely there, there are | | | | About 50-75% of the merchandise will be clearly |
| also adverse factors to consider. | | | | damaged. The remaining 25-50% will be merchandise |
| To start with we need to have a clear understanding | | | | returned because of size or taste issues. |
| of what store returns are. | | | | Meaning those customers are returning merchandise |
| Most major retailers have a program where they | | | | which doesn't fit them, they changed their mind |
| accept returns from their customers. | | | | about it, or received it as a gift. |
| Keep in mind that the returned merchandise does not | | | | This means that in reality the price you are paying will |
| always have to be in its original packaging. | | | | only be giving you 25-50% of the merchandise that |
| For instance, one major retailer, allows returns of | | | | you originally planned on receiving. |
| children's clothing for any reason for an extended | | | | So the $250 is really only buying about $1,250 worth |
| period of time. I have been told that this period is | | | | of retail merchandise. |
| now 6 months. | | | | Remember, realistically you should only expect 25% |
| Since the major retailers want the repeat business | | | | of the merchandise to be in decent condition. |
| from their customers, they will even accept | | | | At this point you are actually paying about 20% of |
| merchandise which might have been damaged by | | | | the original retail value. |
| consumers. | | | | $250/$1250 |
| So what do retailers do with these store returns? | | | | If you are in the retail business you still have room to |
| They have a program where they contract out with | | | | markup the merchandise. |
| salvage dealers, wholesalers, and fulfillment centers, | | | | But if you are in the wholesale or closeout business, |
| who then sell this merchandise for them. | | | | you are in a difficult spot. |
| So if the merchandise is likely damaged, why would | | | | How will you resell this merchandise to wholesale or |
| you even consider buying it? | | | | closeout buyers who need to sell it themselves? |
| For the reason that store returned merchandise is | | | | Also keep in mind the time it will take to sort out the |
| usually sold for as little as 10% of the wholesale | | | | good merchandise from the damaged items. |
| value. | | | | |