Buying Amazon Overstock: All You Need To Know – Part 1

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June 30, 2022 9:25 am

Running your own business can be very rewarding, but getting the right deals and buying the right merchandise to sell to your customers may be a challenge. The most difficult issue is pricing, as you need to buy as low as possible to secure any kind of profit on resale.
Therefore, buying Amazon overstock for resale can be a great business, but you need to plan it well. So, what are these items, and where can you buy them?

What is overstock?
Overstock is merchandise that has never been sold but was actually excess merchandise ordered by the retailer who misjudged the demand for the product. Therefore, the products remain in storage, facing the inevitable decline in value while accumulating unnecessary holding costs. Amazon identifies an inventory as overstock after 90 days. One of the fastest ways to eliminate excess inventory is by selling them to liquidators, such as ARLL.
The great advantage of overstock is that these items are still in their original packaging and are basically brand new. Buying overstock is a great way of buying new stock wholesale, at the cheapest price possible.
The market demand for new products does not justify keeping these products on offer for extended periods because the pace at which they can be sold is not enough to warrant keeping them in the warehouse of a fast-turnover business such as Amazon. Instead, retailers prefer to shift these products in bulk, in large orders of multiple truckloads, to free up space for new merchandise. This does not mean that there is no place in the market for these products and that you can’t make a profit by reselling them.
So now that you have a basic understanding of the terms, it is time to find Amazon overstock merchandise at prices that will allow you to be competitive in any market.

Why Amazon overstock?
Amazon is an ecommerce giant whose net income reached $33.36 billion in 2021. Its platform gathers close to two million different brands, according to Marketplace Pulse research.
With the throughput that the company has, Amazon ends up with a large amount of merchandise that has to be sold in what is known as the secondary market. The company needs to quickly shift the merchandise in order to free up warehouse space. To achieve these goals, Amazon makes use of liquidation companies capable of handling large quantities of customer returns or overstock merchandise.
This spares retailers the hassle and cost of processing and liquidating their own returns and overstock, while letting them extract some value from these products. This is where ARLL comes in to take the burden of liquidating Amazon customer overstock merchandise from Amazon itself.
Overstock is great for your business because it is in a completely unused condition, and comes in either the original packaging or sealed in generic packaging, ready for resale. With the packing list you know exactly what you are getting. The products will be more attractive on resale and may fetch a higher resale price. And usually you may find this stock below the price you are able to negotiate with your usual wholesale supplier.
The fact that overstock merchandise gets liquidated in large amounts, from the pallet to the truckload, helps with keeping the prices even lower. And compared to untested returns, it may come at a higher price point, but you’re also looking at making more on resale. This is another reason why overstock merchandise is so appealing.

Why do you need overstock?
There are some categories where overstock is the best solution, as you need to deal with either new or nearly new items, instead of buying and selling used products. One example is appliances. Sourcing items in new condition requires a greater investment, and even if you have strong business connections to a number of wholesalers, it is hard to get the discounts that could help you stay competitive in the market. You also need to consider the fast pace of turnover in the electronics market. A product that was ‘top of the lot’ last month is not in the top spot today. But these products still provide great quality and there is a place for them in the market.

Next week we’ll share where is the best place to buy overstock and give you some practical advice on how to make easy profit from it. Stay tuned for part 2 of this article!