I receive many requests for wholesale store
return merchandise. And while there is a
big demand for it, I prefer to focus on
wholesale overstock merchandise.
It is understandable why so many
buyers look for store return merchandise.
This category enables them to buy
brand name and designer products
for less than the price of overstock
But the challenge is that the expectations
of buyers is not based on the reality
of what store returns consist of.
People make assumptions of what store
return merchandise is, see how
low the wholesale price for returns is,
and rush to make a buying decision.
I am a big believer in providing
as much information to my customers
as possible, since I believe
that a long term business relationship
will always outweigh a one time sale.
That's why I would like to make sure
you understand the difference between
returns and overstock.
So let's back up a bit and start from
I would like to define for you
these two important categories
that you will see advertised
on closeout websites.
Overstock merchandise is generally
merchandise that a retailer had too much of
and decided to liquidate to a wholesaler such
Picture a department store that has racks of
designer dresses and needs to clear them
out before the new shipment of
dresses arrives next week.
Department stores are known
for constantly turning over their
merchandise since they want everything in their
stores to look brand new.
It is for this reason that many department
stores will have new overstock
merchandise pallets every week!
They would rather sell their overstock
merchandise at a loss than to
cram their stores with unsold inventory.
Products become store returns for
a different reason.
Store return merchandise is merchandise that
customers actually purchased and then
brought back to the store. The retailer
will then liquidate that merchandise to
If you have ever visited a department
store I am sure you have seen people
going to up the cashier with items
that they want to return.
So why do I prefer not to deal with store returns?
Because since store return merchandise
consists of products that were bought and
then returned, there can be a very high
percentage of damaged merchandise.
So while the wholesale price of store return
merchandise can be 20-30% less than that
of overstock merchandise, it can have a
much higher percentage of damaged merchandise
which would offset any benefit
from the lower wholesale price that you
Let's say for example a pallet of
overstock dresses has an
original retail value of
20,000.00, and you purchase
it at 20% of the original retail value.
Your price for the pallet will be
If you buy a store return pallet
of dresses with an original retail value
of 20,000.00, you might only pay
15% of the original retail value,
which comes out to 3,000.00
Yes, you are saving 1,000.00,
but what if half of the dresses
Then your actual price for the undamaged
dresses is 6,000.00
Now the challenge with store return
merchandise is that you do not
know for certain what percentage
of the items will be damaged.
You can get lucky and purchase
a pallet with hardly any damages,
or get a pallet where 90% of the
merchandise is damaged.
So if every store return dress
is in brand new condition you
just saved yourself 1,000.00,
but if every dress has some
damages then you most likely are out
the cost of the pallet.
I say most likely since you might
be able to salvage your purchase
by repairing the dresses or
selling them as is at a huge discount to your
It is for this reason that I believe
you should only purchase store
return merchandise if you
can have the damaged merchandise
repaired, or if you can realistically
sell it to your customers at a discount.
For example, a store return dress might
have a broken zipper. So if you can fix it,
or your customer is willing to have it fixed, then
it can make sense to purchase store return
The same would apply to electronics,
apparel, furniture, and other categories.
You always should disclose the
category of products that you
Ideally you should visit wholesalers
and take a look at the store return
pallets that he or she has for sale.
This will give you a realistic idea of
what you can expect, although it
still won't guarantee what other
pallets might look like.
I love when customers
visit my closeout warehouse,
this way they can see the
merchandise in person
and make their own selections.
Having said that, from my experience
I have seen that usually about
50% of the contents of a store return
pallet are in brand new condition,
25% of the contents are slightly damaged,
and 25% are beyond repair.
The reason why the items will be in different
conditions is because people have many reasons for
returning products to a store.
Some people return products that they
received as a gift, others change their
mind because they feel that the price
that they paid was too high, others
return an item because they don't like
the product itself, and others return
merchandise because it either came damaged, or
they damaged it.
Another good tip is to become familiar with the
return policy of the retailer from which
the store return pallets originated from.
If the retailer has a very liberal return policy
you can expect a high number of broken items.
If the retailer only accepts returns that are in
brand new condition, then you should expect
almost all of the items to be in brand new condition.
I say almost, because salespeople are known
to accept returns in any condition from their
favorite customers. Retailers actually
encourage this practice since they
want to keep a good relationship
with their good customers.
In the past I did wholesale store return
dresses, but now I focus exclusively
on overstock dresses.
I feel it makes more sense for customers
to pay a drop more and know that every
dress will be in brand new condition.
And since my wholesale prices on
my dresses are already super low,
my customers are happy to
pay such a low price and know
that they are going to receive
I actually try to set my wholesale prices
on my overstock merchandise
for less than what others charge for
store return merchandise, this
way my customers can get the
best of both worlds, brand new
merchandise at below wholesale prices.