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Some retailers turn to liquidators especially for holidays

November 26, 2018

GARLAND, Texas (AP) — Turns out that retailers like Amazon aren’t too interested in restocking your returned impulse buys.

Instead, they’ll often wind up in warehouses like one in Garland, where returned goods (including some that have never been opened) are auctioned off for cheap.

The Dallas Morning News reports as holiday sales pick up, so do returns. The end of November marks the beginning of busy season for people who work in returns management, so the Garland warehouse where Liquidation.com sorts, packages and auctions off returned goods will kick into high gear through the new year.

There’s a “Christmas effect” that comes with shopping at the warehouse, manager Scott Birlew said.

Liquidation.com has contracts with companies like Amazon, The Home Depot, Bed Bath & Beyond and plenty of others, so what gets returned to those businesses can end up bundled in “mystery” boxes and pallets, where items are grouped and sold off for much less than their normal retail prices.

“You don’t know what you’re going to get, and you’re pretty sure there’s something there you’re going to like,” Birlew said. “You just don’t know what it is yet.”

That mystique of the return bundle has inspired a niche genre of YouTube videos, in which vloggers and professional resellers buy pallets of returned goods and open them in videos that can last anywhere from 20 minutes to nearly an hour.

YouTuber Frank Passalacqua, who makes tech-focused videos as randomfrankp, posted a video in August titled: “I Paid $250 for $1,932 Worth of MYSTERY TECH! Amazon Returns Pallet Unboxing!”

In it, he takes out each item one-by-one, examining them. Among the gems in the boxes: a pair of wireless headphones that normally sell online for about $328, which is more than he paid for the whole lot.

But of course, the bundles aren’t without their duds. YouTuber Safiya Nygaard bid on a health and beauty-themed mystery pallet that included a few hair-removal items and some hair stylers, among a slew of other unexpected items in the lot. In her video, she tested out each product. Some didn’t work, and others were clearly used, like an electric razor with hairs stuck in the blades.

At the Liquidation.com warehouse in Garland, one of the company’s five warehouse locations in North America, staffers sift through boxes and boxes of returned items, sorting trash from treasure.

Each day, anywhere between two and 20 trucks drop off loads of goods that other retailers don’t want to deal with. The majority of the items are returns, but there are also shelf pulls — new items that a company had too much of, or items that have since been overshadowed by a newer version — as well as salvaged items, Birlew said.

Last holiday season, 28 percent of gifts purchased ended up being returned, creating a huge influx of supply for Liquidation, Birlew said. This year, it’s gearing up for even more returns, which creates a treasure-trove for customers.

“The increase in supply from our sellers creates a gold mine of inventory for our buyers, and of course at great prices,” he said.

On a recent Wednesday at the warehouse, the building housed boxes of food (popcorn, single-serve coffee pods, granola bars and even some Soylent meal replacement bottles) among mattresses, kayaks, 4K TVs and all sorts of home appliances. Some were already sold and waiting on customers to come pick them up, and others had yet to be auctioned off.

Shelves were stacked to the ceiling with inventory at the warehouse, but they’re not meant to stay there long, Birlew said. Auctions on the website only last a few days, because the company’s goal is to get product out of the warehouse quickly — not make the most money.

“We’re not looking for 50 people to get out there and bid against each other and drive the price up to the maximum,” Birlew said. “We’d rather have 1 million dimes than 100,000 quarters. We don’t want to have to go out and buy 10 more buildings like this.”

When truckloads of stuff arrive at the warehouse, it’s sorted into categories so it can be auctioned off with similar items. If products are damaged, staff will decide whether it makes economic sense to refurbish them, strip them for parts, or discard them.

In the refurb department, technicians test products — like speakers and headphones — clean them, and fix them with donor parts or parts that they purchase. That way, they can be sold at a higher price.

Customers bid online for what they want, and if they place a winning bid, they can either have it shipped to them or they can set up a time to pick it up themselves, to save on shipping costs.

But besides YouTubers who make novelty videos, who’s buying these mystery bundles of items from Liquidation?

Mainly people who plan to resell the products in some way — though Birlew said he recalls a customer with eight grandkids who bought $4,000 worth of trampolines for $400 one year to earn best grandpa status at Christmastime.

Liquidation’s sister company, Secondipity, focuses more on business-to-consumer sales (also at steep discounts), whereas Liquidation is primarily business-to-business.

Alton Warren, a regular buyer of Liquidation bundles, makes a living by reselling goods through his business, Warren Liquidation Auction & Resale.

He recently visited the Garland warehouse to pick up a lot of mostly mobility equipment, including a few wheelchairs and knee scooters.

He buys bundles of general merchandise to round out the lots he’ll auction off himself. Once, he was surprised to find a refurbished laptop that he now uses for work.

“I like the assorted lots,” Warren said. “When you buy the shelf pulls, those are real cool because you never know what you’ll get in those. The general merchandise — those are fun to go through. When you pick up that box, it’s just a big hunt.”

His pickup was tinged with disappointment, though, because he fell asleep during a few bidding battles, and some of what he had wanted slipped away.

“But next week, I’ll be back and they’ll have some more,” he said.

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Information from: The Dallas Morning News, http://www.dallasnews.com

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