Losing Money with Amazon Returns Auctions

It’s been almost a year since we bought a batch of returned toys from Amazon at auction. The purchase at the time seemed good but after 12 months the end result was not so good.

Mistakes we made when buying the lot

I’ll start with the easy part. When purchasing the lot, we made a few mistakes. We were able to learn these lessons by looking back. Without having the experience, it would have been difficult to know.

• Do not bet on items in the lot: sometimes you have a list with the products of the batch. There were 2 or 3 products that we expected to get our money back on. These products turned out to be flawed, so profiting from them became a lot.
• don’t bid too much: The lot would have been a good buy for half the money. In the end, you always get carried away by emotions that bid much higher than we should have.
• Underestimating the work of reselling products: It’s one thing to ship 100 units of a product to Amazon, but it’s a totally different thing to ship 100 products with a single unit. The time invested is multiplied by 10-20 and with it the profitability decreases.

Positive things I took away from the experience

During my vacation I was able to inspect some of the products that were difficult for us to get out. We did it as a family. It was fun to take the products out and try them out. We were able to enjoy a few Nerfs that we even took with us to Germany. We also brought water guns which we tried on the beach but later proved to be faulty.

With the move ahead of us and considering the space taken up by all these products, we finally made the decision to give away all those products that were still in good condition but not worth selling. Last week an NGO took them away and it looks like the toys will go to Ukrainian refugee families in Spain.

Lessons learned

When evaluating lots, you need to be more pessimistic about the condition. If you have a list where 30% of defective products appear, you should assume that it is in fact 40%.

You need to be clear about the resale effort. We, apart from Amazon, are listing a piece for sale on Ebay and Wallapop. The ratio between the time invested and the money recovered was not very good.

Focus on bundles with well-known toy brands. That’s what we did, but in the end we realized that the percentage of not-so-top brands was too high. Anything that was well known brands even in not so perfect condition came out pretty quickly (eg Lego).

You need space to store the lot. We made the purchase in our old premises which have less than 100m2. With that, I tell you everything. A lot of things that go in usually come out instantly. In this case, it was not possible.

In short: in the very short term, I would not do it again. The same later from the new location if it could be tried again but this time the purchase price should be much lower. In the end, the benefit comes down to one simple thing: the purchase price.

Stay tuned.