Liquidation services resell returned items, a $644 billion business
Inside Liquidity ServicesGarland’s 130,000-square foot warehouse, Texas has aisles that are not lined with standard merchandise. They are instead filled with return merchandise. Amazon, Target, Sony, Home Depot, WayfairAll of this is happening as the company liquidates.
The liquidators are now buying bulk quantities of the product. Then they package it, pack it up, and then resell it. eBayOder PoshmarkIndividual consumers, and even the entire industry. It’s become a larger portion of the sector than ever before,” stated Sonia Lapinsky, a consultant from AlixPartners.
The market for liquidation has increased more than twice since 2008 to reach $644 million in 2020 according data from Colorado State University.
Zac Rogers is an assistant professor at Colorado State University in supply chain management. Since nobody is looking at the returns, it’s a great way to hide your money. 40 years ago, people didn’t look at returns.
In 2021 however, the record will be broken 16.6% of all merchandiseThe sale was returned to 10.6%, up from 10.6% for 2020 according to the National Retail Federation. Online purchases had a higher average return rate at 20%, up from 18.9% in 2020. According to a returns company, processing a return could cost retailers as much as 66% of the item’s original retail price. Optoro.
People are very concerned about rising prices right now. “I would suggest it is possible that part of the inflation comes from these large amounts of returns that must be sold at loss. This is detracting profitability that companies normally have, so they need to increase their prices,” Tony Sciarrotta said. Reverse Logistics Association.
The environmental costs are also significant. Non-liquidated returns are frequently destroyed through incineration, or being sent to the landfills. Optoro estimates U.S. returns generate an estimated 16 million metric tons of carbon emissionsYou could generate up to 5.8 trillion pounds annually of landfill waste
Liquidators are now making a lot of money from this pain point in mainstream retail. This booming market is now home to many thousands of companies. One is GoodBuy GearThis company is a specialist in safe liquidation of items for infants and children.
Buy one Used Item it saves 82% of its carbon footprintConsumers are making smarter choices and they’re really beginning to do so. Kristin Langenfeld is CEO of GoodBuy Gear and co-founder.
Shopping options that are sustainable and ethical can be found here growing priority for younger shoppers.
Bill Angrick (CEO of Circular Economy) stated that the circular economy is designed to connect these items with a family member or young person and prevent them from going to landfill. Liquidity Services. With $100,000 from his savings, he cofounded Liquidation.com in 1999.
“My dad and I used to collect used books and recycled bottles. Now, eBay is here. It was something my father and me started playing with. We discovered that a market model could create value for almost any kind of used item,” Angrick stated.
Bill Angrick, CEO of Liquidity Services, and Katie Schoolov, Senior Producer at CNBC, tour a Garland warehouse, Texas on January 31, 2022.
Liquidation.com launched in 2000. its first major saleThe state of Georgia purchased a $200,000 boat for its marine fleet. It was renamed Liquidity Services in 2006 and went public. Its stockIt peaked in 2012, and then trended downward over the following seven years. There was an upswing during 2012. the Covid pandemic.
Liquidity Services is the largest publicly traded liquidator. The other big player is Liquidity Services. B-Stock SolutionsIt manages branded liquidation platforms for large clients, such as Amazon, Walmart, Home Depot, and Costco. After six years working at eBay, Howard Rosenberg started B-Stock. He saw the value in specializing on liquidation at scale and decided to start B-Stock.
Companies don’t usually want to focus too much time or effort on a small slice of the pie. Rosenberg explained that they want to concentrate on the 99 percent of the pie.
Liquidity Services is a seller of returned products on many marketplaces. There’s Liquidation.comWhere pallets of returned items and individual items can be auctioned to the highest bidding bidder SecondipityFor the direct sale of single items GovDealsYou might be interested in unusual products.
“We have sold complete gymnasium floors, road paving, and scoreboards. Our marketplace has all the equipment and uniforms for public universities and colleges. We also sell construction equipment. We also sell bucket trucks to power companies and utilities,” Angrick stated.
Liquidity Services handles also unclaimed mail, packages and other items for customers U.S. Postal ServiceOut-of-service military cars and any items that were left behind at TSA Checkpoints. 14 pounds of assorted knives.
Electronics are often returned in damaged condition and they can’t be returned for resale. Liquidity Services sells TVs for 60 to 70% less than the original price every day. The popularity of refurbished electronics has grown. supply chain backlogThis has led to a shortage of new goods. These headphones, TVs, and other noise-cancelling devices are highly sought after.
On January 31, 2022, a Liquidity Services employee refurbished a television in Garland (Texas)
“We have witnessed Fortune 500 companies purchase used equipment from our market because the time it takes to ship is shorter than originating a new product and putting it on a boat, shipping across the ocean to a port that’s probably backlogged for six to seven months,” Angrick explained.
As demand grows for secondhand goods, many retailers now sell refurbished products directly. Amazon even has an entire section dedicated to it. There’s Warehouse DealsFor used goods Amazon RenewedFor refurbished goods, Amazon OutletFor overstock or a tongue in cheek daily deal site, on the fringes the Amazon community called WootThat sells for $10Bag of Crap.”
It’s possible to get 80%-100% recoveries from the refurbishment, depending on the season. However, right now the market is extremely strong due to the shortages in the forward side,” Julie Ryan (HP’s North America return manager) said.
A second trend emerged as a result of the liquidation boom. Many bargain-bin stores with names like Dirt Cheap Treasure Hunt Liquidators. Dozens of customers line up — sometimes even camping overnight — to get first pickAfter weekly drops of liquidation pallets. They dig through big bins of returnsYou are looking for trending itemsThey can also flip the property for profit.
On February 11, 2022, shoppers gathered to look through the liquidation pallets in Treasure Hunt Liquidators, Raleigh, North Carolina.
Treasure Hunt Liquidators
“Stores like Big Lots, Bargain Hunt, Ollie’s Bargain OutletThis is what all these retailers, then eBay, and Amazon have done. Sciarrotta from the Reverse Logistics Association stated that they are selling returns to the consumers as 90% of the times, it’s fine.
Liquidity Services is a different take on the direct to consumer trend. Visit the new company website AllSurplus DealsPhoenix opened its first warehouse in October. It allows customers to pick up any items won through online auctions. Prices start at $5. These are especially useful when liquidating large items such as kayaks which can be difficult to ship. Angrick states that Liquidity Services plans to open a second AllSurplus Deals Warehouse in Dallas this year.
You can see inside Liquidity Services’ warehouse in this video. It is a great way to learn about the business and how it works.