The "reverse supply chain": vast warehouses of deeply discounted, returned goods

When your return your unwanted Amazon purchases, they end up with discounters who sell them by the palletload at pennies on the dollar, and millions of "reverse supply chain" specialists bid on these pallets of miscellania, sort the usable from the useless, repackage it, and make it available for sale again.

The largest of these companies is Liquidity Services/liquidation.com, with 3.35 million registered users. Some of these are bargain hunters, but others are resellers hope to pan gold from the river of rejected trash and put it back on sale.

Predictably, there's a get-rich-quick cult that has sprung up around liquidation resellers, with a whole supply chain (geddit?) of hustlers who will sell you lessons on how to achieve financial independence through canny liquidation arbitrage.

Alexis Madrigal finds lyricism in the liquidations, with the found poetry of a manifest for one of these palettes ("hiking crampons, shimmer fabric paint, a High Visibility Thermal Winter Trapper Hat, a Mr. Ellie Pooh Natural White Paper List Pad, a St. Patrick’s Pot O’ Gold Cupcake Decorating Kit, a Spoontiques Golf Thermometer, a Feliz Cumpleanos Candle Packaged Balloon, and five Caterpillar Hoodies for Pets") which he describes, beautifully, as "a core sample drilled through the digital crust of platform capitalism."

A level-headed Flint, Michigan, liquidation reseller named Walter Blake Knoblock offered a more realistic assessment in a live video he posted last year. He proffered five rules for Amazon pallets. The first? “Don’t expect it all to be good.” “ Don’t get discouraged if you’re halfway through your pallet and it’s all trash,” he said. In his business, it’s typical to throw away a third to half of everything.

After other rules about electronics (“boom or bust”), shipping (“Understand freight cost”), and sales strategy (“Speed through your inventory; don’t squeeze it for every dollar”), he gave his final lesson: “Don’t invest money that you absolutely need. It isn’t like a savings account at your bank. You’re taking a risk.”

Where Amazon Returns Go to Be Resold by Hustlers [Alexis C. Madrigal/The Atlantic]

(Image: Akira Ohgaki, CC-BY)