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Amazon Customer Returns vs. Shelf Pulls: Which is Better?

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Amazon customer returns are a gold mine for resellers. Resellers have stopped hunting for deals at garage sales and thrift stores. Instead, they're buying goods by the pallet to save time, money, and maximize their profits. Amazon customer returns are getting a lot of attention thanks to unboxing videos on YouTube. But, there's another less-known way to make a profit from liquidation: shelf pulls.

"Shelf pulls" is a merchandising term to describe surplus items. Unlike customer returns, these items are unopened and are in new condition. Shelf pulls happen because of miscalculations in pricing or poor forecasting from the manufacturer. Let's look at the main differences between Amazon customer returns and shelf pulls. We'll weigh the pros and cons of both, and talk about which one represents a greater potential for resellers.

What are Amazon customer returns?

By now, you've probably heard of at least a few Amazon reselling success stories. Like, for example, this guy that paid $250 for $1,932 worth of mystery tech. It's hard to see numbers like that and not want in on the action. So, what are Amazon Customer Returns?

Amazon makes a ton of money selling goods online, but Amazon customer returns are a big issue for the company. Returning items to sellers involves shipping, handling, labor, and inventory costs that would be very costly. So, this leaves Amazon with little choice but to get rid of the items at a low cost.

The costly process for Amazon customer returns means big business for some. Resellers that once relied on Walmart, thrift stores, and coupon clipping to buy low and sell high now have a new alternative. Now, they can buy Amazon customer return pallets to save time and get even higher margins.

What are shelf pulls?

Unlike customer returns, shelf-pulls are new items of stock that have failed to sell. Shelf pulls are sometimes referred to as store stock. Shelf pulls are usually the result of:

  • Pricing miscalculations
  • Poor inventory management
  • Seasonal merchandise that needs to be moved
  • Items that need to be moved to free-up floor space

Again, this is brand new merchandise that the retailer can no longer sell and needs to move. Shelf pulls are more attractive for resellers because they're usually in great condition. An issue that many people have with Amazon return pallets is that a large amount of the products can be damaged. With shelf pulls, resellers can be confident that the merchandise isn't defective or faulty.

With shelf pulls, it's important to understand why the items are being pulled. For example, let's say a retailer has a licensing deal with Marvel and is selling Avengers t-shirts. Eventually the buzz surrounding the movie will die down, and sales of Avengers t-shirts will decrease. They'll want to sell off inventory to make room for the next trend.

In this case, the issue the retailer faces is a cultural one. If you can find a market for the Avengers t-shirts, there's a big opportunity to make money. You'll want to make sure you can find a demand for the merchandise. In many cases, the demand exists at a slightly lower cost or with a different approach.

Which is better, shelf pulls or customer returns?

It depends on your reselling business model. Shelf pulls are attractive because like-goods are bundled together. They contain large quantities of the same item, so other retailers can use the items to stock up their own locations. Having multiple units of the same item can make your retail location appear more credible.

Shelf pulls also provide the consistency that resellers and retailers need. A pallet of customer returns can include items from completely different business categories. Shelf pulls are advantageous for companies that have a specific niche and don't need a diverse set of goods.

Where to buy return pallets and shelf pulls

Buying Amazon   customer return pallets and shelf pulls can be tricky. You'll want to seek out return pallets that have at least been sorted through for some level of quality control. Also, you'll want to buy shelf pulls that still have market value.

Wholesalers usually buy products, sort through them, and resell them with a slight markup to end users. On the other hand, liquidators will act as a bridge between the retailer or manufacturer and the end users and sell the items as quickly as possible. Let's review some other key differences.

1. Buying Amazon customer returns and shelf pulls through online liquidation companies

  • A large portion of liquidation merchandise is unsorted customer returns.
  • There is not as much quality control, as this would add labor costs for the liquidation company.
  • There is little to no unbundling and re-bundling to ensure products are sorted with a level of consistency.
  • They often won't give you much detail about what the pallet contains.
  • Online liquidation companies will give you a "manifesto" of the goods that sometimes do not match up to what is actually on the pallet.
  • Shipping costs can be unpredictable and are sometimes higher than the cost of the pallet itself.

2. Buying Amazon customer returns and shelf pulls through wholesalers

  • Returns pallets will have a better level of quality control, they will at least discard any clearly broken goods.
  • Wholesalers will do some unbundling and re-bundling to ensure products are sorted with a level of consistency.
  • Wholesalers can sometimes give you a bit more detail about what the pallet contains.
  • A trusted wholesaler will be more transparent about any shipping costs.
  • If your wholesaler is local, you can save big time by picking up the pallet yourself.

In short, a wholesaler might have a slightly higher markup to account for their services. But, in the end, it's usually worth it. Some buyers of liquidation pallets report that about a third of their pallet is junk or faulty goods. While a wholesaler might not reduce that number to zero, they will be able to get it down quite a bit.

Also, knowing what's in your pallet is considered a big win. Buying liquidation pallets is usually a gamble, as you'll often get one or two photos of the entire package. A wholesaler will sometimes provide more product photos will help you reduce your chances of getting items you're not interested in.

Again, you're in luck if you can find a local seller of Amazon customer returns or shelf pulls. You'll be able to cut your costs drastically by picking up the pallet yourself. And, even if you can't pick up the pallet, the shipping costs from a local wholesaler can be much lower. You won't be paying for cross-country shipping and labor costs.

At Take It By The Pallet, our New York location is conveniently located so that you can stop by and check out our pallets for yourself. We help our clients find product bundles that make the most sense for their reselling structure. Take It By The Pallet offers fair pricing, fair deals, and expert advice to make sure you get the best bang for your buck.

How to resell Amazon customer returns or shelf pulls

Funny enough, many of the resellers we work with end up listing their products back on Amazon. Others make large profits on eBay, at estate sales, flea markets, or second-hand shops. Some of our customers even use pallets to stock up inventory in their retail stores. Let's review some tips to make sure you get the best return on your investment.

Selling customer returns and shelf pulls on Amazon

Amazon offers two selling plans. The Professional selling plan is available for a $39.99 monthly subscription fee plus per-item selling fees, which vary by category.

According to Amazon, If you plan to sell fewer than 40 items a month, the Individual plan may be best for you. There is no monthly subscription fee. Instead, Individuals pay $0.99 per item sold plus other selling fees, which vary by category.

Additional fees apply when you use Fulfilment by Amazon (FBA) to pick, pack, ship, and provide customer service for your products. Amazon has a guide to FAQs that will be helpful should you choose to sell on their platform.

Selling shelf pulls, overstock, and returns on eBay

eBay gets a cut when your auction sells. After your auction or fixed-price listing ends, eBay charges the Final Value fee to your account. Final Value fees on auctions are rather easy to figure out. If your item sells, you pay eBay 9% of the selling price to a maximum of $50.00. If you need a simple guide to selling on eBay, this article can help.

Selling Amazon customer returns and shelf pulls on Craigslist

Selling items on Craiglist is attractive because Craiglist does not charge any fees to sell. But, Craiglist won't give you the option to ship items. This will limit your sales to people who are willing to travel to you or vice versa. Also, Craiglist is a hotbed for scams. Buyers often try to pay with bad checks, or via online don't clear. If you're going to sell on Craiglist, a good practice is to only accept cash.

Resale opportunities at garage sales and estate sales

Garage and estate sales can be a quick way to resell your items. However, it's important to understand the mindset of garage sale hunters. They're usually accustomed to getting items for extremely low prices. They know that in many cases, garage sales are an attempt for homeowners to clean out their house or offload items before a move.

Bottom line: know your pallet, margins, and resale plan

In short, the more you understand the process, the easier it will become. Soon, you'll have first-hand knowledge about which items have the highest margins. You'll also start to see which items sell fast, and create a strategy around those goods in the future.

Learn more about:TIPS TO BID ON PALLETS & BOOST PROFITS  liquidation pallets
Bobby Fallas

Bobby Fallas

30 plus years of wholesale experience