By Karl Baxter, CEO of Wholesale Clearance UK
The British public loves a bargain and the latest online craze – clearance return pallets – sees people make large profits from unwanted stock returned to large retailers like Amazon and Argos.
Online searches for these money-making pallets having risen by 170% in recent months.
But while this scheme has only just captured the nation’s attention, businessman Karl Baxter, CEO of Wholesale Clearance UK has been doing it for years.
In this Q&A, Mr Baxter shares his expert knowledge and reveals his top tips and tricks for making money on return pallets…
What are return pallets?
“The latest online re-sale craze, return pallets, are where retailers bundle up their customers’ unwanted stock and resell it in bulk at a discounted price.
“Usually sorted into themes, this means that anyone looking to purchase the unwanted stock can get a large number of kitchen appliances, for example, for a fraction of its original selling price.
“As a wholesaler who specialises in bankrupt and surplus stock, as well as end of the line clearances, we have long seen the value in buying the pallets and selling the stock onto individuals or other companies of all sizes.
“The pallets can come from all types of businesses in the UK. It can be bankrupt stock, overstock, discontinued lines, past season, customer returns, Amazon stores – all sorts of avenues.
“As we only deal with UK based stock, it’s a quick and easy turnaround for us to purchase or rehome and for it to get to the buyer.
How often do you invest in resell pallets?
“There is no hard and fast pattern to when stock is available, so we have to be ready to think and act quickly to get the best bargains for our customers as well as the best return for the businesses offering the stock.
“Every day hundreds of pallets of stock are dealt with by Wholesale Clearance whether through us purchasing, our distribution network or our third-party sales platform.
Is there much competition to get your hands on the stock?
“As we are one of the largest and most trusted clearance wholesalers in the UK, we find a lot of stock is offered to us first, but as with everything, you have to be ready to pounce as it may have been offered to other clearance outlets at the same time.
“Of course, we have a strict structure in place for how we buy so we can always ensure that our clients are getting the best possible deal for the stock in question.
What is the general price range for a resell pallet?
“Depending on what the items are, the condition of the stock and the volume, a pallet can cost anywhere from £50 to £5000.
“On average, we would be looking at selling the stock for between 5-20 percent of original RRP so clients could be getting £5,000 worth of stock for as little as £250!
What’s the interest like from your customers? Have you seen a rise in demand?
“As we have been dealing in the area for nearly 20 years, interest from customers has always been great, whether it is for box loads, pallet loads or a container full of stock.
“There has been a rise in demand over the past few years as more and more people have taken to online selling (Amazon, eBay etc.), and they are looking for the best deals to start their business or add to existing lines – hence why we offer small starter bundles from £20.00.
“However, more recently, from mid-January onwards, we have noticed a marked increase in people searching for wholesale pallets (170% upturn) – so this is an in-demand area.
Why do you think this has suddenly become popular?
“Looking at market trends and the associated buyers, a large reason for the popularity is the ease in which anyone can get started in buying and selling now with, in all honesty, potentially limited knowledge of the products they are selling.
“For example, you could buy a pallet of 10,000 mixed pieces of party stock (cups, invites, costumes, plates, balloons etc) without knowing too much about it. You then scan the barcode (almost always there will be an Amazon advert for it!), input your selling price, and within 20 seconds, you have your item listed for sale.
“The only thing you may want to do is research the prices before buying, but other than that – if it has a barcode, you are almost guaranteed to be selling as soon as the stock arrives.
“Another reason for the popularity where return pallets are concerned is the sheer volume on offer, hence why you should exercise caution.
What have been your biggest bargains available for customers buying the pallets?
“Most of our stock is priced at 20 percent of the original retail price or less, so an item originally sold for £10 would cost our customers £2 or less (as a starting price) – the more you buy, the better deals can be had.
“Here are some examples of exceptional bargains we have recently sold (all brand new stock):
– 50 pieces of mixed chain store clothing with a total retail value of approx £500.00 for £105.00 (20% of RRP)
– 250 pairs of ladies ex high street shoes with a total retail value of approx £8,750.00 for £1312.00 (15% of RRP)
– 10,000 mixed costume jewellery items with a total retail value of approx £20,000.00 for £1200.00 (6% of RRP)
– 1,000 mixed high street store cosmetics with a total retail value of approx £7,990.00 for £1000.00 (12.5% of RRP)
– 25,000 high end branded sunglasses with a total retail value of approx £5,000,000.00 for £186,000.00 (3% of RRP)
What risks are associated with this?
“As with all buying and selling, there are risks involved. Yet, with returns pallets, they are enhanced – by the fact they are from customer returns, which can include unchecked returns where some items may be damaged or incomplete.
“There are many different types of returns, so it is important to understand what type of returns pallet you are buying. Unmanifested pallets bring another dimension of risk, as you do not necessarily know what you are getting, which can sometimes be disappointing.
“As we are customer-focused, we offer (uniquely as we understand in our industry) returns in ANY case for buyers, including on return pallets.
What advice have you got for anyone looking to invest in surplus or unwanted stock?
“We are very hands-on with our buyers and offer as much help based on ours and our customers’ experiences as we can.
“Whilst ultimately it is the buyer’s job to sell it, and there is no necessary pattern to follow, we can always try and guide them into buying suitable things for their chosen venture.
“To minimise risks, customers should research the items they are planning on buying on the platform they are looking to resell on.
“This is another reason why (as well as pallet purchases) we offer small offerings, so buyers can try lines in the knowledge that if a certain line doesn’t perform as well as hoped, they have not invested too much into it.
“With higher-performing items, the buyer can then come back and buy more/all at a better price and concentrate on the better returns of investment.”