Question
I've always been tempted to buy a pallet of stuff (store returns, old models, etc...) for resale.
What is a good price to buy at compared to retail?
Say the pallet is worth $5,000 retail.
Should it be bought for $500 or is that too much?
Also what is the rule of thumb for buying wholesale?
When you resell it should you double, triple or quadruple it?
Can anyone help?
Answer
if it were that easy to sell pallets for that much on ebay then all these companies selling pallets would be ebay sellers.
I would guess if you were lucky you could double your money but you will probably be looking at a 50% gross margin.
Answer
they are a gamble, but they can be fun too.....just don't spend anything you can't afford to loose. ....just like going to a casino
but you are still dealing with retail mark up no matter how you lok at it.
Answer
Originally Posted by grumpygramp
I've always been tempted to buy a pallet of stuff (store returns, old models, etc...) for resale.
First off, if it were too easy everyone would do it.
If you have a source that does not charge you shipping you may have an upper hand to those that do not.
Some of those sources KILL you with shipping charges unless you can buy a whole trailer full.
I have to say however it would be FUN
Yes, I am very sick.
Answer
Don't buy anything that doesn't have a manifest unless you personally inspect it. Don't believe that crap about them not having one. If they can't tell you exactly what you are getting you don't want it. TRUST THIS - they do know exactly what it is & it has been inspected.
Shop around. Many nearly identical pallets can be found, the price varies widely. Shop different shippers too - some charge triple what others do.
Find a friend or friendly store that will let you take delivery there if you don't have a storefront. Residential deliveries have much higher rates usually.
Try to get some things directly from the source rather than a 3rd party. They charge a fortune for some of those pallets. It takes research to find the source, get busy googling, calling, & emailing.
Answer
Thanks for the replies so far.
I do realize that it would be risky.
And I do consider it a gamble and won't risk anything I can't afford to lose.
But what I'm asking is:
Isn't there any industry standard for buying this kind of stuff?
Like only pay 10% of retail?
Lets take a pallet worth $5000 retail value.
I realize that retail value means nothing and if all the stuff was new and working you probably could buy it for $4000 in a store.
But its a good way to compare stuff.
OK, so its worth $5000 retail. Since its returned stuff its probable only worth $2000.
If sold on eBay maybe only worth $1000.
So is $500 (including shipping) to much to pay for the pallet?
What spurred me on to ask this question was that I say Jim bought some pallets of DeLonghi stuff that sells on Amazon for $60 and was selling it on eBay for around $20-25.
Answer
I cant answer the question directly since I have never attempted to purchase returns.
BUT.....
A local auction I attend was doing Sears returns for a few weeks.
90% or more of it was defective. Possibly more. Every one I know who purchased from it had defective items, or ones that needed costly repairs to get to functioning. SOme indeed paid low enough prices to still have a bargain with repairs.
The moral of this story is: if it has been returned, there is generally a good reason, though there will always be some klutz who cannot figure out the instructions on a VCR or DVD player.
But to pay any more than a few cents on the dollar is certainly not wise.
Answer
Ok, I didn't realize you were interested in returns. I have never seen a returns pallet worth buying, but I have not spent too much time looking at them. Broken beyond repair is what I have seen. Stick with new, it only costs a little bit more.
The price isn't based on retail in general. The ones I buy (again, new) are a % of the wholesale value. Remember that these DID NOT sell at the retail price, which is why the company got rid of them in the first place. The things I buy are about 23% of the wholesale price, not retail. I generally get between 25-50% of retail on ebay.
Also, a lot of it is seasonal so make sure you can sell it all before the next cycle. For ex. I have a bunch of Spring/Summer items I bought last Dec. I had a baby in March with medical problems so had to travel to another state for his treatment. By the time things settled down after I got home & could list I didn't have time to sell it all before the season changed. This means I have several pallets of merchandise with several K invested it in sitting in storage that I can't sell until next year.
Answer
No, there aren't "industry standard" rates-of-returns for entrepreneurs. Experienced entrepreneurs might chuckle a little at the question.
In order to make money, generally, you need to break new ground. That means taking risks. That means you might not have a great idea what your initial return will be.
It's like any kind of investment. You can play it safe, buy what everyone else is buying (whether it's DVDs or bank certificates of deposit), but your profit is slim.
Or you can take a chance, try something that isn't already saturated through and through, and perhaps score higher returns.
If you want to see how a large business goes about selling as-is merchandise on eBay, check out seller bargainland-liquidation. Low prices realized, no returns allowed, and lots of unhappy customers who didn't read the auction description.
fLuFf
--
Answer
They multiple selling IDs, so if you find an item search on the same title and you will see the seller under different names. I think one's idea of "retail" needs to be defined. I might consider selling on eBay "retail", but the prices are not the same as say a department store.
One piece of advice I will give you is to know the acronyms. If you sound like a newbie when communicating by phone or e-mail, that will be a disadvantage during negotiation. Under the logistics involved with trucking a pallet to your business and/or home. I'm sure if you research enough there will be transportation service sites that go into detail the terms and the process of moving pallets around.
View this:
http://pages.ebay.com/ebaylive/highlights2004.html
Finding New Sources of Products (Advanced)
The first presenter - I believe Chinese - will go into a summary of what to consider when purchasing. I think you'll find it helpful.