Reverse supply chain: Reselling Amazon returns has become a billion-dollar business

[mongeese]

The big picture: Amazon has an immensely popular 30-day return policy, which sees billions of dollars worth of almost-new products sent back to their warehouses every year. While Amazon repackages some products and sells them as “new” or resells them as “used,” a substantial amount of product ends up being sold to massive liquidation sites who sell them in bulk for a fraction of the original price.

Liquidation.com is one of Amazon’s main returns resellers, shipping $626.4 million worth of product last year contributing to a total of $7 billion throughout the company’s lifetime. Their business model is to buy returned products from Amazon and other stores, put them in crates with 50 other products and sell them at 5-15% of the market value. Right now you could find a GTX 1070, X299 motherboard and 240mm AIO in a box of 49 products for just $120, for example.

Most of these products were sold on Amazon, probably for Christmas, and then returned because the customer didn’t want them or they didn’t work. Amazon most likely paid for them to be shipped back to their warehouse, where an employee considered how long it would take to determine if they are working and to repackage them. Being computer hardware, it can be quite time consuming to see if they perform as new, so they were put in the liquidation pile.

Amazon tries to sell their liquidized products as fast as possible to avoid paying for storage, so they let Liquidation.com buy them for just a couple of percent of what they were sold for a few weeks earlier. They were part of the $33.7 million Liquidation.com paid Amazon for their products last year. Liquidation.com then roughly categorizes the product, takes a photo and puts it in a box, then auctions the whole box off.

The majority of Liquidation.com’s customers are other businesses that buy boxes in bulk, test the products and sell them. While this easy and theoretically high-margin work has attracted a lot of 'get rich quick' schemes and even made a pretty penny for some people when their YouTube unboxings go viral, the business is actually quite challenging.

Two Yahoo Finance reporters brought a box each and tried to sell the contents, and while one found some valuable cryptocurrency mining hardware, he didn’t understand what it was. Ultimately both made a loss. Only about two-thirds of Amazon returned products find a new home, according to resellers. With estimates of over 20% of products being returned to Amazon, however, that adds up to billions of dollars.

Permalink to story.

https://www.techspot.com/news/78449-reverse-supply-chain-reselling-amazon-returns-has-become.html

 

[Uncle Al]

Unfortunately I have received a number of repackaged "new" products that were damaged and had to be returned. They attempted on more than one occasion to give me less than what I paid stating the product was "used". When I explained to the customer service agent how the purchase was made, that I still had all my paperwork, and that the state took a very dim view of mail order fraud, the return immediately received a 100% refund. You've got to really watch them!

 

[Evernessince]

Unfortunately I have received a number of repackaged "new" products that were damaged and had to be returned. They attempted on more than one occasion to give me less than what I paid stating the product was "used". When I explained to the customer service agent how the purchase was made, that I still had all my paperwork, and that the state took a very dim view of mail order fraud, the return immediately received a 100% refund. You've got to really watch them!

Yeah Amazon has been getting worse and worse with that lately. Thanks to their prime intermingling of goods, it's hard to make sure you get the product you paid for in the right condition. I shop on a variety of websites and out of all of them Amazon makes the most order mistakes. I've even bought mined on graphics cards off eBay that have been working fine for years now (1st mining boom).

Buying those boxes seems a bit risky as the author pointed out. Whether or not the parts work is a complete guess.

 

[Scshadow]

I've watched a few videos about buying liquidation pallets of items from Amazon. While it definitely seemed like there was a potential for money to be made, I have to say it seemed like a whole lot of work. A whole bunch of trash was mixed in with a few sell-able items. Some easy sells sure, but then a lot were products that would be hard to find a buyer for. I can see it being an good extra little side hustle for people with extra time and energy on their hands so long as they were carrying a steady paycheck from other means.

 

[Bpsti]

Unfortunately I have received a number of repackaged "new" products that were damaged and had to be returned. They attempted on more than one occasion to give me less than what I paid stating the product was "used". When I explained to the customer service agent how the purchase was made, that I still had all my paperwork, and that the state took a very dim view of mail order fraud, the return immediately received a 100% refund. You've got to really watch them!

Yeah Amazon has been getting worse and worse with that lately. Thanks to their prime intermingling of goods, it's hard to make sure you get the product you paid for in the right condition. I shop on a variety of websites and out of all of them Amazon makes the most order mistakes. I've even bought mined on graphics cards off eBay that have been working fine for years now (1st mining boom).

Buying those boxes seems a bit risky as the author pointed out. Whether or not the parts work is a complete guess.

I'm honestly always surprised by how many people refuse to believe that a mined on video card is ok to buy. For whatever reason even people who should know better seem to think videocard=car and so a card that's been "used" a bunch is somehow all worn out. Its especially wrong with the 10xx series cards since they can't even be dangerously overclocked. The worst thing someone could do is run them really really hot, but most miners were running their rigs significantly cooler than a gamer would run his (my 1080ti's ran around 65-70c on the mining rig but hit 85c inside my gaming PC as a good example). An open air case just has a major airflow advantage.

Another thing to consider is age. A 1070ti can't be any older than September or October of 2017 meaning a used 1070ti still has over 3.5 years of warranty left if you buy an EVGA or ASUS card. I'm not sure what price their going for right now but if you can get one in the 200-250 range than I'd say that would be a much better deal than a 2060 would be. Save that extra 100$ to put towards the *actual* next gen cards everyone will be releasing in 2020. Those handful of games nvidia bankrolls to have RTX added will all be in the 20$ range by then too! So its a win win!

 

[fktech]

Amazon makes you pay return shipping and sometimes a restocking fee. Everyone is making money off the consumer.

 

[Scshadow]

Amazon makes you pay return shipping and sometimes a restocking fee.

Yeah... cause thats what you should do if you are returning a non-defective product. The moment you open that product, it looses value. You damaged the value of the product and you should pay. If it is defective, then you don't have to pay for that.

Everyone is making money off the consumer.

I don't think you understand the point of selling things...

 

[ShagnWagn]

Amazon makes you pay return shipping and sometimes a restocking fee.

Yeah... cause thats what you should do if you are returning a non-defective product. The moment you open that product, it looses value. You damaged the value of the product and you should pay. If it is defective, then you don't have to pay for that.

Everyone is making money off the consumer.

I don't think you understand the point of selling things...

If the product is not as advertised, or there is an issue with the product not disclosed prior to sale, then a full refund is due. Such as a mouse I bought from Razer. They did not disclose they need to track you with personal information just to change the mouse from a default rainbow color. It was immediately returned. I hope amazon made Razer eat the loss. If not, it is at least a bad mark against them, plus a bad review. Same thing with Garmin watches - they don't work unless you agree to upload all of your data and personal information to the internet.

I avoid ordering from amazon anyway. They are not the cheapest on products, plus now they charge sales tax when they aren't even in my state (freakin ripoff). The government raised their tax rate 10% overnight! I order maybe once or twice from them now. Prime is a ripoff for me, too, and it's false advertising. I did the trial and it took them a week just to put my stuff in a box! I also avoid so they do not become a monopoly. Now they are hiring strangers off the street to walk onto people's property in random vehicles and street clothes for deliveries. Lots of people are freaking out about that. The drivers are getting ripped off, too. Some delivery routes they actually lose money.

 

[Mike89]

I'd be nervous on computer parts. I once returned a motherboard that was just plain bad. Bummer to think someone else bought it after I returned it and then had to go through the headaches I did with it. On the other hand I can see some good from it. In the past I have returned perfectly good speakers just because I didn't like the sound of them for my situation. Someone got a good deal buying those.

 

[PEnnn]

You should read the reviews on CPUs bought from Amazon. The number of wrong items sold that doesn't match the packaging is astounding (i5 instead of I7, missing CPU in a box!), DOAs, used sold as new, Caleron G1840 instead of an i7 8700 in one case...etc.

Just do a search on 8700 and read the 1 star reviews, it's mind boggling!! And while you're there, read the reviews for Sandisk MicroSD cards...and the fakes being peddled!

 

[Knot Schure]

Amazon makes you pay return shipping and sometimes a restocking fee.

Yeah... cause thats what you should do if you are returning a non-defective product. The moment you open that product, it looses value. You damaged the value of the product and you should pay. If it is defective, then you don't have to pay for that.

Everyone is making money off the consumer.

I don't think you understand the point of selling things...

If the product is not as advertised, or there is an issue with the product not disclosed prior to sale, then a full refund is due. Such as a mouse I bought from Razer. They did not disclose they need to track you with personal information just to change the mouse from a default rainbow color. It was immediately returned. I hope amazon made Razer eat the loss. If not, it is at least a bad mark against them, plus a bad review. Same thing with Garmin watches - they don't work unless you agree to upload all of your data and personal information to the internet.

I avoid ordering from amazon anyway. They are not the cheapest on products, plus now they charge sales tax when they aren't even in my state (freakin ripoff). The government raised their tax rate 10% overnight! I order maybe once or twice from them now. Prime is a ripoff for me, too, and it's false advertising. I did the trial and it took them a week just to put my stuff in a box! I also avoid so they do not become a monopoly. Now they are hiring strangers off the street to walk onto people's property in random vehicles and street clothes for deliveries. Lots of people are freaking out about that. The drivers are getting ripped off, too. Some delivery routes they actually lose money.

I too gave up on Razer after my keyboard purchase - for the same reason.

Unfortunately here in Asia, chances of returning much of anything are low.

But it was my last Razer purchase, and they are discounted by me, and anyone willing to listen to me, when recommendations are made.

 

[Knot Schure]

You should read the reviews on CPUs bought from Amazon. The number of wrong items sold that doesn't match the packaging is astounding (i5 instead of I7, missing CPU in a box!), DOAs, used sold as new, Caleron G1840 instead of an i7 8700 in one case...etc.

Just do a search on 8700 and read the 1 star reviews, it's mind boggling!! And while you're there, read the reviews for Sandisk MicroSD cards...and the fakes being peddled!

The only way to deal with this bait & switch fraud is to buy NEW SEALED, rather than supposedly new & unsealed.

Ignore the 'only opened to test cpu', ads, I'm quite sure Intel / AMD was able to test a new cpu fine, before it entered the box...