The costly journey of returned goods means big business for some

An employee walks between rows of storage racks at one of Amazon.com's fulfillment centers in Rugeley, U.K.

Simon Dawson Bloomberg | Getty Images
An employee walks between rows of storage racks at one of Amazon.com’s fulfillment centers in Rugeley, U.K.

There’s a good chance that the $100 printer, the $300 wide-screen monitor, or the $170 router you recently bought from Amazon weren’t supplied to the e-commerce giant by their original manufacturers. In fact, the order may have been fulfilled by someone like Casey Parris, who resells items that customers previously returned to retailers.

Based in Florida, Parris spends about five hours each day visiting thrift stores and scanning auction and liquidation websites for interesting items, he told CNBC. Sometimes he finds auto parts, other times it’s a pair of sneakers, and occasionally he purchases printer cartridges — all with the goal of reselling them.

Walter Blake, who lives in Michigan, does the same. For years, he’s been selling electronic items on Amazon that he acquires from a network of places.

 

Blake and Parris are part of a growing cottage industry where dealers acquire discarded items at very low prices, only to resell some of them back on Amazon and eBay at a premium.

Retailers don’t mind that — that’s because retrieving returned items can sometimes cost more than reselling them earns.

Returned goods offer little returns

With the gift-buying season just around the corner, retailers must brace for more returns.

Last year, customers in the U.S. returned about $351 billion worth of items that they had purchased from brick-and-mortar retailers and online stores, according to estimates by National Retail Federation.

Revolve, a California-based online clothing retailer which filed for a public listing earlier this year, disclosed that it made just under $400 million in net sales last year — but paid out $385 million for return items, according to one industry expert.

[“source=cnbc”]