Buying Wholesale Liquidations and Returns by the Truckload - How It Works and What It REALLY Costs!

today we are going to talk about buying pallets of merchandise for major retailers before i got into appliances dealing with this sort of merchandise was something that i worked in it's a great business but it can require a good bit of money to find the best deals and i'm going to show you how that all works in this video this is a truckload full of merchandise and it's worth about fifty thousand dollars at msrp on 28 pallets from a major hardware focused retailer the actual cost to buy this however was roughly 11 000 500 shipped this sounds like a deal too good to be true but is it let's find out while i am unloading this truck in the background let's talk about why someone would actually be able to buy something for way less than retail it all starts with a lady named karen sometimes karen has to return a product because it's defective but most of the time she's taking the item back because her 200 a month collaring cut is more important than keeping the house at a reasonable temperature leaving everyone else in anguish just like how she deals with customer service everywhere she goes but karen's loss can be your game because when a lot of karen's which is called a homeowner's association gets together and returns enough items a pallet is made if the items have box damage aren't packaged properly missing parts or allegedly not working they're then shipped back to a central hub which are then itemized and sold either as a truckload or part of a truckload some places will sell smaller sizes than a truckload but the best deals are always in volume depending on the store the pallets are usually themed like appliances housewares tools bath and kitchen furniture or other major departments if you find the right broker it's going to be a set price of the pallets based on retail or msrp each department may have a different percentage off based on the condition of the items the items returned from internet orders for example are typically in better shape while in-store returns are more likely to have damage so there are a few ways that they price them but it's always at a order level which may be in the thousands or tens of thousands of dollars to get a good really good deal and when you order that much this is what you get sweat into the oldies in the back of a tractor trailer and since i'm not nearly as fit as richard simmons it requires a lot of effort and sweat equity to push this stuff to the back of the trailer but it is worth it because i paid for all these appliances on this truck one of the wild cards with these pallets as a pallet business is the condition of the items that you you get in stock it's like christmas when you open up a pallet because you don't know the quality of the items on it i would say though that i've had really good luck with air conditioners since i've been buying them for the past two or three months there's a few asterisk marks sometimes they come open box like this one here and there's clearly no side kit for it so we will have to reduce the price well it looks like there's some sort of side kit for your windows but it's hard to say for certain and here's a good example of what we get in stock this one looks brand new it's banded encased ready to sell from ge uh clearly the tag on it says it is 149 from ge and that's what it would sell for at the store i'm going to probably put 100 on it which is lower than i normally do but it is near the end of summer so prices are reducing just a little bit my wholesale cost on this though is quite a bit lower if my memory serves correctly on something like this type of air conditioner even though it says 149 on it home depot likely only charged me about 110 on the manifest and then i only paid about 33 to 34 for this one after shipping was included so the reality is it if it's a hundred and ten bucks well let's round down to a hundred i may have only paid thirty three dollars for otherwise a brand new inbox 150 ge air conditioner and again i'm gonna probably sell it for a hundred dollars so i will pretty much triple my money on it and there's quite a few uh air conditioners on this that i should be able to triple my money on generally the goal is to double your money but with defects and open box issues i should be in a good position to double my money at least on the air conditioners but every load is different and what they contain some items are much harder to sell than others these double door 4.5 cubic foot refrigerators i pay about 35 dollars for these and i'm usually getting anywhere from 125 to 145 on these if they're in good shape i will be honest though and the likelihood of those working in perfect order is actually not nearly as good as air conditioners it seems like there's a fail rate on these that vary from appliance type to appliance type air conditioners oddly are the best upright refrigerators are probably about 70 percent maybe 65 percent working fans tend to actually be the worst that i have seen it's like people tend not to take them back unless they truly don't work so i'm going to go ahead and take this palette apart just real quick and maybe go over another air conditioner or two that's out of the box but before i was really able to cut into the wrapped pallets customers started rolling in for air conditioners knowing that time is of the essence i decided to start listing items on friday when i got them into my shop i had rough counts on the items so here is one of the listings i had in the responses for the pallet business much like the appliance business i rely on facebook marketplace rather heavily and the response to in demand items tends to be brisk so the truth is that before i really could finish cutting the palette i had to stop filming to sell items to customers since i am making the video not just to sell the video but to sell the items that i bought and wanted to share the experience with you the viewer so in between cutting the saran wrap off of this palette i ended up selling one of the upright freezers that was right there for 235 dollars i still have one left ended up finding out i had a good bit of damage on the bottom of it so i may have to discount that from 235 but i'm gonna have it pop up on the screen what i actually paid for them i want to say only pay like 60 bucks for these upright freezers and since we are having great difficulties right now finding freezers in the united states they go for a premium and i make probably the most margin on these of anything that i have i may have to discount this one but when you get these loads in you never know the condition scratch indent isn't necessarily a bad thing because usually that's why it gets rejected at the the customer's house or even the home depot so if you get away with just a scratch or dent it's not a big deal what matters is if it works or not so i had to go off camera actually for two or three days now because i had too many customers coming in in between shooting the video and i had to basically give in to selling things instead of shooting a video which is great for me but you know terrible for you so a few things i probably sold about i mean 15 to 20 air conditioners since i started taking this video off of this load so i have already made back a decent portion of what i had invested in this load and one of the things i wanted to talk about was just the fact that it's so random when you get this stuff in your building what the condition of things are going to be sometimes you're going to get things that are absolutely new in box like these lg portable air conditioners i am not paying a whole lot of money for these i actually printed out like a little list and it's going to be in the video of what i am actually paying for every given thing you can see what the retail list price is and then what my cost is on the units this is a rough cost per unit and it may or may not include shipping but it's the true real wholesale rate that i have to pay for any of my items in here so i'm using this as a reference point on what i'm actually paying so when it comes to something like these air conditioners as i muddle through paperwork i can tell you that my cost on these portable air conditioners uh on these fourteen thousands tends to run about 105 dollars roughly each now if you look these up online on the model number that's down here you're gonna find out that those retail anywhere from between four to five hundred dollars at least on the internet now the key here and the secret is that when i'm paying a percentage of retail it's not actually msrp on these things and it's something that the pallet type people will use to cheat you out of better profits see if you look on my retail sheet regarding these air conditioners i know this is so unscientific on the portable acs right here the retail cost on it's about 330 dollars not 500 and i'm paying a percentage off of that 330 not the 500 so again my cost is 100 but if you go through some of the online marketplaces they're going to say that they're 500 and maybe you get them for 30 of 500 rather than what home depot or another retail store actually is going to charge you and that's kind of one of the shady things that they do in the market that i have seen so we're going to go through and look at a few other things right here we got air conditioners and the reason i picked this load i was able fortunately to kind of accept or reject is i ended up getting something like 30 of these ge air conditioners it's still a little bit warm outside but it's not as warm as it was earlier on maybe two months ago i was charging about a hundred and ten dollars for each of these it's a little bit cooler now so i'm charging about uh 85 to 100 each on these and my wholesale cost on them um roughly right here we're looking at about 42 dollars each so i am doubling my money maybe getting a little bit more out of them now if you're looking at this video and say well it's really really easy and you should be making a bunch of money there is the asterisk mark of whether or not the things work and also if they're actually in box here is a stack of those 5000s and some 6000 b2 air conditioners and this is how they arrived they were on pallets individually you may have seen them earlier in the videos so we have a tendency to test the open box ones and here is my good pile of working open box units i have found out through testing about 20 of these that were open box that only about two or three were actually not working and i had to write off so at the moment i'm at about 90 percent of the air conditioners working my experience is the air conditioners have a very high likelihood of working portables almost always work the catch is whether or not the window kit is in these boxes or not that's why i have found that portable acs are sold or returned back to home depot so i may have to go on ebay and spend 30 dollars on a window kit and then i have a brand new fully functioning portable air conditioner that maybe i have spent a hundred dollars on or 130 on that i have no problem or shouldn't have any problem selling for 300 and that's for where i live which is in rural ohio and i generally don't get the best prices for what i have the two biggest challenges with dealing in appliances like this is the overwhelming volume of what you have to take on at once if you go to a pallet auction you're going to get maybe one pallet of items and it's manageable but you're going to deal with a huge markup most pallet entities are going to charge 50 percent of msrp which again is higher than retail so when i'm dealing with this i get it at 32.5 percent roughly for appliances however i have to take a lot all at once this is one truckload approximately 20 pallets and it can go up to 28 pallets because you do want to buy as much as possible to save on shipping which is a huge factor in what you're making on it and of course not everything is going to sell super fast i start with the really nice stuff which are the air conditioners and then we work our way back to the things they throw in on the pallets that just don't sell super fast but they're still decent money makers however what i find is not everything has a 10 percent fail rate when it comes to fans i deal with a much higher fail rate on them and there's of course a ton of arctic errors i got from multiple loads about 80 here and i got probably double that in other boxes that we haven't taken apart whether or not these are really crappy units or they're liquidation it's hard to say but my wholesale cost on these is about eight dollars and for the most part i'm able to sell them for 20 but at this point i just need to get rid of them before it gets too cold outside so i've been marking them down to twelve dollars each i probably won't make any money once you factor in them being damaged possibly but at least i can break even on the junky stuff and then make all my profit from the air conditioners other fans like velasco's i've been a big fan of these because they're american made but when it comes to returns these things are absolutely horrible i would say maybe half of them work if i'm lucky the larger fans actually work a little bit better and a lot of times on these i'm not making a lot of profit you can check on my list what i'm actually paying for them i want to say i'm paying between five and ten dollars each and after you factor in break factor and breakage i'm making breaking even maybe making a few dollars but it's definitely not where i'm going to make money except for when i hold on to for example these sorts of heaters the heaters are going to sell for a lot of money in the winter and i have found that they tend to be working quite well so i have a little storage cubby with like 60 of the larger vornados i should do okay on one of the other catches that you have is the fact that even though there is a manifest that you have a good idea on what you're getting it's not always honest this is a half sized but much larger than a mini-fridge rca refrigerator it's new in box it's banded which tells me it's basically good and ready to go but the catch is i didn't pay for an rca refrigerator i paid for a gallons retro refrigerator which has a higher retail value than what the rca has an msrp on and the gallons fridges if you've ever seen them are probably like the coolest on the market and they will actually sell for over retail you can get 300 out of one but this rc may go for 200. and when you deal with manifests like this you have to be on the understanding what you see that you will have is not what you're going to get this is a 25 000 btu air conditioner i have someone coming from 200 miles away to get this today retail on this is 800 i talked to him about possibly um doing it for 500 which my cost on it's going to be under 200 so i'm going to make 300 off that today um other items again everything isn't going to sell for the same speed i have just incredible amounts of microwaves that i have stored because i will sell microwaves decently okay maybe three or four a week but if i get 20 per shipment then guess what i get a lot built up i'm at the point i am going to hold off on some orders to hopefully get all this stuff sold of course none of this matters without actually moving the inventory so i decided to list what we sold from the pallets over the course of six days of being open from the day after getting the truckload which was a friday to the next saturday for roughly eight calendar days we sold 8 200 worth of items but some of which were on previous truckloads roughly 7 100 of the 82 hundred dollars was from this truckload which means factoring in what i had to pay on my portion of the truck i can now order another one and start the process all over again if i had room for it that is all the other items you saw in boxes are from previous truckloads and that's the key to buying and breaking down pallets is keeping inventory rolling in and liquidating as fast and hard as you can so what is left from this truckload to sell going forward that is essentially pure profit as of today after i total these numbers up i have in retail value roughly twenty nine hundred dollars in fans thirteen hundred dollars in mini fridges a thousand dollars in small window acs nine hundred dollars in portable acs seven hundred dollars in microwaves and then about an extra thousand dollars in heaters larger air conditioners and miscellaneous items on the advertisements so far i primarily focus on liquidating this fastest safest most expensive items and it worked pretty well now i have to focus on targeting on the other items but shouldn't have much of a problem selling them over the next few weeks factoring in items that will get returned i should be able to profit between five and six thousand dollars on this load potentially we can earn more if we're able to fix some of the air conditioners and freezers that were dead on arrival but otherwise looked good that could be salvaged hopefully this video explained to you some of what happens with obtaining truckloads of pallets and the possible revenues from the business you definitely need space and cash to get into it but the profits and speed of sales aren't pretty bad and the stuff is more often good than bad but feel free to like subscribe and comment if you have any questions about the business and have a great day you

Channel: Bens Appliances and Junk

Views: 55,902

Keywords: How to buy wholesale liquidation pallets, how much does a truckload of customer returns cost, where can i buy wholesale customer returns, home depot customer returns, home depot wholesale pallets, what do pallets of customer returns look like, what items are on a pallet of customer returns, how to find wholesale appliances

Id: 9mzifFPz_-I

Length: 18min 52sec (1132 seconds)

Published: Mon Aug 31 2020