How to buy and sell Amazon return pallets in 2025

According to Amazon, they processed around 500,000 items per hour in 2023. And that’s just considering US-based sellers. So, with an average return rate of 16.5% for online sales, it’s logical to expect that there’s a massive volume of merchandise that flows back to warehouses daily. This creates a unique opportunity for enterprising sellers looking to capitalize on Amazon’s return problem.

When customers send items back, Amazon faces a dilemma. Individually processing each return is costly and time-consuming. This is especially true for third-party sellers who often abandon returns rather than pay restocking fees. The solution they came up with? Return pallets.

Amazon consolidates these returns into pallets sold at steep discounts through liquidation channels. With the growth of resale culture, sustainability trends, and economic side hustles, these return pallets have become hot commodities for resellers looking to turn Amazon’s challenge into profit.

Amazon’s current return processing methods

Amazon handles returns differently depending on who fulfilled the original order. For FBA (Fulfillment by Amazon) items, Amazon manages the entire process, evaluating condition upon return. With seller-fulfilled orders, the individual sellers handle returns but must follow Amazon’s strict policies.

Once received, returns undergo inspection and categorization. Items might be labeled sellable and returned to inventory, or designated unsellable due to damage, defects, or being opened. Some items qualify for returnless refunds when shipping back isn’t economical.

Electronics often enter the Amazon Renewed program after refurbishment, though this requires seller approval and high compliance standards. For everything else deemed unsellable, Amazon offers several paths. They can be returned to the seller, disposed of, or liquidated. There’s also the invite-only FBA Grade & Resell program for some.

Why liquidation pallets exist and how the market has evolved

The sheer volume of returns made individual processing unsustainable. Amazon and third-party sellers began bundling these goods into pallets to recover at least some value from items that couldn’t be resold through traditional channels.

Today, Amazon partners with established liquidation platforms like B-Stock and Direct Liquidation while also selling directly through its Bulk Liquidations Store beta (available to Amazon Business customers). The offerings range from “Smalls” (high-volume accessories and gadgets) to “Bigs” (TVs and furniture), clothing pallets with up to 1,200 units, and curated high-end pallets featuring in-demand brands.

Benefits and challenges of selling Amazon return pallets

Pros

• The low cost of entry makes return pallets accessible to nearly anyone with an entrepreneurial spirit. Pallets start around $200 to $500. Although there are high-end electronics pallets that can range from $1,000 to $13,000.
• There’s also a strong profit margin potential. Individual items can be resold at 30 to 300% markup when properly refurbished or bundled. The product diversity across categories also creates countless selling opportunities in various niches.
• And now, sustainability has become a major selling point as eco-conscious consumers seek alternatives to new products. So, the growth of resale platforms—from Amazon and eBay to Facebook Marketplace and niche sites like Poshmark—provides flexible selling options for liquidation inventory.
• Each pallet contains hundreds or thousands of units, making them ideal for flea markets, bin stores, or bundle offers. You just have to be strategic and creative.

Cons

• Unpredictable quality remains the biggest challenge. Even manifested pallets (those with inventory lists) often contain surprises. These include damaged, used, or completely unsellable items.
• Return policies are virtually nonexistent in the liquidation world. Sales from Amazon’s Bulk Liquidation Store and most other liquidation sites are final and non-refundable, creating risk for buyers.
• The logistics can be daunting. Freight costs for pallet or truckload shipping run high and often require forklift access or dock delivery. You’ll need substantial storage space—a garage, storage unit, or warehouse—to sort and store goods.
• The process is intensely labor-intensive. Pallets must be sorted, tested, cleaned, and listed. Some items need repairs or part-swapping, while others require photography, packaging, and customer service management.
• As the market matures, competition has increased significantly. Profitable pallets command higher prices, and underperforming lots can result in substantial losses. 
• Platform restrictions create additional barriers, as some marketplaces (especially Amazon itself) prohibit selling used or untested returns without proper certification.
• Finally, manifest accuracy varies a lot. Lower-tier vendors often provide incomplete or misleading information about pallet contents.

So, who is this business model right for?

Successful return pallet resellers typically have ample time and space. You also need the willingness to put in physical effort sorting, testing, and preparing items.

It’s also perfect for sellers already comfortable with listing, shipping, and customer service. For example, bin store or flea market operators can leverage pallets for high-volume, low-cost merchandise that drives daily walk-in sales.

There are also repair-savvy individuals who can restore electronics or assemble bundles to get better value from each pallet. 

Budget-conscious entrepreneurs testing ecommerce or building side hustles benefit from the low capital requirements, and can also make it in this niche. Meanwhile, eco-conscious resellers drawn to reducing landfill waste and promoting circular commerce find purpose alongside profit in this business model.

How to buy Amazon return pallets

The process is straightforward but requires careful preparation. 

1. First, register with a reputable liquidation marketplace. Platforms like Direct Liquidation, B-Stock, and Liquidation.com require account creation, and some need business documentation or resale certificates.
2. Next, choose a pallet category based on your niche, budget, and experience level. Options range from electronics and clothing to mystery pallets or those with detailed manifests.
3. Carefully review the pallet manifest or listing description. Analyze quantity, item types, estimated retail values, and condition notations (new, used, salvage).
4. Decide your purchasing method. Some platforms use auction formats where you bid against others, while others offer fixed-price purchasing.
5. Calculate total cost beyond just the winning bid or purchase price. Factor in shipping fees, liftgate services, taxes, and potential refurbishment expenses to understand your true investment.
6. Arrange delivery logistics, especially for large pallets. Ensure you have access to a loading dock or can pay for residential liftgate delivery.
7. Once received, immediately sort your inventory into resellable, refurbishable, or parts-only categories to begin the selling process.

How to evaluate a pallet before purchasing

Read manifests effectively

A good manifest provides essential details: 

• item name and ASIN/UPC
• retail value versus estimated resell value
• condition ratings (New, Like New, Damaged)
• quantity per item. 

Use this data to calculate your estimated ROI per pallet.

Create a simple spreadsheet to track potential profit. Multiply each item’s estimated resale value by quantity, then subtract the pallet cost and associated expenses. This gives you a clearer picture of potential returns before bidding.

Pay close attention to condition ratings. “New” items typically resell for 70 to 90% of retail, while “Like New” might fetch 50 to 70%, and “Damaged” only 30 to 40%. These percentages help create realistic revenue projections.

Red flags to watch for

Avoid listings with no manifest or vague item descriptions. These mystery lots might seem exciting, but carry substantial risk.

Be wary of lots with excessive accessories or “parts only” items. These often indicate low-value inventory that’s difficult to resell profitably.

Scrutinize listings that overuse terms like “uninspected returns” or “unknown condition.” This language often masks poor quality merchandise.

Steer clear of pallets from unknown sellers with no reviews or feedback. The liquidation market includes legitimate players but also attracts scammers selling worthless inventory.

Setting maximum bid limits

A conservative approach keeps profitability in focus. Start with 20-40% of the retail value listed in the manifest as your maximum bid.

Factor in additional costs beyond the purchase price. Include shipping fees, platform commissions, repair/refurbishment expenses, and storage or prep costs in your calculations.

Set hard limits before bidding and stick to them. The excitement of auctions can lead to emotional bidding that exceeds profitability thresholds.

Assume the worst condition for each item when calculating potential profit. This builds a margin of safety into your bidding strategy, protecting against manifest inaccuracies.

Return pallet selling strategies that work in 2025

Once you’ve acquired your liquidation pallet, strategic selling maximizes your ROI. Here are some tips.

Sell in the appropriate marketplace

Choose the platform that makes most sense for each product type and condition.

eBay is a good idea if you have electronics and mixed-condition goods. Its established buyer base expects deals on open-box and refurbished items. The robust condition rating system lets you accurately represent an item’s status as well.

Facebook Marketplace and Craigslist are best for large and bulky items that would be expensive to ship. Local pickup eliminates packaging and shipping costs while also allowing buyers to inspect items personally. These platforms work particularly well for furniture, appliances, and oversized electronics.

Amazon itself can be viable for refurbished, new, or open-box items via FBM (Fulfillment by Merchant). However, selling returned items back on Amazon requires meeting strict condition guidelines and often seller approval for certain categories.

Finally, specialized platforms like Poshmark focus on apparel, making them ideal for clothing pallets. Mercari and OfferUp facilitate quick local and niche sales with simplified listing processes and lower fees than eBay.

Use pricing strategies

Successful sellers undercut retail while maintaining healthy margins. Aim for 60-80% of the retail price for items in excellent condition. Then you can adjust downward based on wear, packaging condition, or missing accessories.

Create value through bundles that increase cart value. For example, pair a phone with a charger, case, and screen protector so you can price them higher than if you sold each separately. This strategy works especially well for accessories and complementary items, often found in return pallets.

Also, monitor competitor prices with repricing tools to stay competitive without sacrificing margins. The liquidation resale market fluctuates rapidly, so you have to constantly adjust your prices to maintain visibility and sales velocity.

Seller 365 tools to optimize Amazon return pallet reselling

Amazon’s massive returns volume creates opportunities for savvy resellers. But you need the right tools and strategies to make sure these liquidated items become a profitable business venture.

Seller 365 makes this possible with its suite of 10 seller tools that you can get for the price of one. Here’s how it can help exactly:

• InventoryLab can track costs per unit and profit margins from the moment you unbox your pallet. The integrated listing workflow saves hours of manual data entry when preparing items for sale. The system’s accounting tools also simplify year-end financial management.
• SmartRepricer then gives you a critical edge. Since it’s an automated pricing tool, it continuously adjusts your Amazon listings based on customizable rules. You’ll win the Buy Box more frequently while still maintaining your target profit margins.
• Then, for building a stellar reputation, you can turn to FeedbackWhiz Emails. It’s an automated way to send review requests, which is important when you’re trying to prove quality as a return pallet reseller.
• You can then use FeedbackWhiz Alerts for real-time notifications of negative feedback, listing hijacking, or unauthorized changes. This protection is crucial when selling items sourced from liquidation. Condition concerns might arise more frequently than with new inventory.
• Lastly, use FeedbackWhiz Profits for SKU-level profit analysis. Its granular view will help you identify which categories and condition grades perform best. This way, you can refine your liquidation buying strategy for maximum returns.

The good news is that you don’t need to buy all these tools we mentioned one by one. Since they’re all part of the Seller 365 bundle, you only have to pay $69/month to use them all. You even get 4 other tools for sourcing and scouting if you want to go beyond return pallets.

Want to try your luck in reselling Amazon return pallets? Try Seller 365 free for up to 14 days now.

FAQs about Amazon return pallets