Start a Pallet Flipping Business
Pallet flipping is a well-known side business in the US and the UK and is a great way to make extra money. Starting this business doesn’t need a lot of time or money. To launch a profitable and effective pallet flipping business, you must have the necessary skills.
Beginners can start with less expensive, smaller-scale pallets before moving on to larger, more expensive ones depending on how successful it turns out to be.
We’re not talking about those wooden constructions here; instead, we’re talking about bundles of goods from shops. Because they are no longer able to sell the individual products, retailers sell these bundles. These explanations include consumer returns, items that aren’t selling well, and items that were damaged in transit.
What is Pallet Flipping?
Pallet flipping is the practice of buying a quantity of unsold or returned goods from a store and reselling them for a profit. These pallets frequently include items that you may purchase for a fraction of the price yet are worth thousands of dollars.
However, there are hazards involved because it’s not uncommon for the actual contents of a pallet to be unknown, so it’s best to purchase from reputable vendors. While a pallet of broken returns is possible, you can also find one that is full of flawless goods that simply didn’t sell well.
This strategy is frequently used by retailers to make up losses. For instance, industry experts estimate that returns cost retailers in the UK £60 billion annually. Therefore, selling pallets to customers makes sense. These pallets can contain a variety of things or only certain types, such apparel, office supplies, or electronics.
Is Pallet Flipping Profitable?
“It can be,” is the response. But there are other variables that affect profitability.
Now, a key factor is the kind of commodities you’re working with. For instance, if there is a great demand for and decent condition of electronics, they might be quite profitable.
Contrarily, clothes might be successful or unsuccessful depending on the styles and sizes offered.
Your pallet source is also important. Direct purchases from merchants or producers might result in high-quality products, although the price per pallet might be greater. While wholesalers and liquidation auctions may offer reduced costs, the goods’ condition and worth may be less predictable.
We can also say as professionals that how well you sell the things is crucial. We consider this when:
- Your selling platform (e.g., eBay, Amazon, a physical storefront)
- Your marketing skills, and
- Your ability to price items competitively
How To Start a Pallet Flipping Business
If you’re looking to start a pallet flipping business and earn some money, you need to be prepared to put in some effort and have patience. Here are some straightforward steps to get you started:
1. Be Smart About Buying Pallets
Purchasing pallets is often dangerous and involves more than just quick purchasing and selling. Keep doing what you know. Buy a pallet full of gardening supplies, for instance, if you enjoy gardening. By doing this, you’ll already have a general notion of the prices of the things, saving you some time on your investigation.
It’s possible that not every item on your pallet sells right away. Seasonality may apply to some products. In the winter, for instance, no one will purchase grass seeds, but they may be drawn to the leaf blower on the same pallet.
2. Research Thoroughly
In the pallet flipping industry, research is essential. Before making a purchase, try to receive a list of the contents of the pallet. If not, do your own research on the products to learn their retail value and how much they go for on other websites. This can help you determine whether purchasing the pallet is worthwhile by giving you an indication of the potential profit.
3. Track Your Products
Pallets contain a variety of items. Keeping track of what you have and where it is can be very useful. Some details to note include:
- Item’s Name and Brand
- Item Description for Resale Sites
- Item Condition
- Retail Price and Resale Price
- Listing Information (including site)
- Sales Status
- Final Sale Price
Keeping these details can help you stay organized, and it will make it easier to calculate your return on investment.
4. Get familiar with your sales platforms
Selling items you’ve got from a pallet can be quite beneficial when you make good use of platforms like eBay and Facebook Marketplace.
eBay is probably the biggest online auction platform and can give you an excellent stage to sell your goods. You can reach a global customer base while staying at home. All you need to do is provide a good description of your item and be sincere about its condition, then watch it sell fast.
b. Facebook Marketplace
If you’re more interested in local sales, Facebook Marketplace is your best bet. You can list your items for sale within your vicinity and buyers can come pick them up. This is especially helpful if you have large items to sell. As with eBay, a well-detailed description is all you need for your items to get buyers.
c. Kijiji and Craigslist
These are free-to-use online classifieds platforms, primarily serving local areas.
Users can list items to sell to others nearby.
Compared to VarageSale, you can complete transactions online and have items mailed.
Note: We’ve observed a higher occurrence of scams on Kijiji compared to other platforms, but this may only pertain to our specific area.
- This is a free-to-use selling app, similar to eBay, available on Google Play and the App Store.
- You can list items for sale quickly and shipping labels are provided by the platform.
- It applies a 10% selling fee on listings but offers shipping discounts and a consistent fee across all 50 states.
- The seller can decide whether to pay for shipping or charge the buyer.
- This is a free-to-use platform, great for buying or selling clothing items in bulk.
- Poshmark takes a commission fee: $2.95 for sales under $15 and 20% for sales above that.
- It provides the shipping label and buyers cover shipping costs.
- From our experience, shipping fees do not deter buyers from Poshmark.
- This is a free-to-use selling platform, focusing on local transactions.
- It’s ideal for selling items from liquidation pallets as buyers can find items easily and sellers can avoid shipping costs.
- VarageSale emphasizes community building with face-to-face transactions.
- Its app and integrated messaging system simplifies communication between buyers and sellers.
- We found it particularly useful for selling clothing and household items.
5. Prepare for some groundwork
After securing your pallet and listing your items for sale, the next step is looking into delivery if you offer it. Research thoroughly on your cheapest and best delivery options. You have several shipping choices.
i. The Post Office
Let’s come in from the UK perspective. Small parcel prices at the post office begin from £4.29 for 2nd class postage with online confirmation of delivery. For medium-sized parcels, prices start from £7.10 for 2nd class.
They can weigh and measure your items to determine the accurate shipping fee.
UPS is a great choice if you’re shipping items abroad, enabling you to ship from your doorstep directly to theirs. However, it can be quite pricey, so it’s advisable to have your customers pay for shipping.
Next day delivery for a small package starts from £4.75 at Hermes if the item is dropped off at a ParcelShop or locker drop-off. This is a good option for next day shipping but ensure there’s a convenient drop-off location close to you.
Where to Find Pallet to Flip
1. Online Liquidation Auctions
It’s common to find pallets on websites like Liquidation.com or BStock.com. These websites are regularly used by large shops and corporations to auction off their excess goods.
It is convenient because you may bid on and buy these pallets from the comfort of your own home. Before making a bid, do thorough research, comprehend the auction’s terms, and take delivery expenses into account. Listed below are your auction alternatives if you live in the UK:
This company sells excess items from catalogs and high-street shops, along with customer returns.
The products are grouped into pallets based on categories like bathroom, stationery, and electronics, but there are also mixed pallets. A notable feature of Marthill is that they provide a list of items contained in each pallet and the original retail price of the product.
Like Marthill, Merkandi sells excess stock and returns. They also deal with undelivered packages from various sources, including eBay and UPS. The contents of these undelivered packages are not listed, so purchasing them is a bit like a surprise or luck dip. This platform could be exciting for those who don’t mind surprises and aren’t aiming to sell a specific type of product.
c. UK Stock Supplies LTD
This site is a bit different. Instead of selling pallets of goods, they list individual items for sale. The offerings range from universal bath legs to mixed doors. This site could be particularly useful for people who need to stock a shop because you can purchase items that are more specific to your needs.
2. Local Auctions
Keep a look out for pallets being sold in nearby neighborhood auctions. Local auctions have the benefit of allowing you to physically check the pallets before buying, giving you a clearer idea of what you’re investing in.
Insights and relationships in the pallet flipping industry may be gained by participating in the auction community.
3. Retailer Direct
Some larger retailers like Walmart offer programs selling surplus inventory directly to consumers. These Direct Liquidation Programs can provide a steady and reliable source of pallets. But understand the terms and conditions thoroughly, as they can vary significantly between different retailers.
4. Wholesale Directories
You can try wholesale directors when you start a pallet flipping business – online wholesale directories such as Worldwide Brands or SaleHoo can connect you to numerous reliable pallet suppliers. They offer a wide range of suppliers with different specialties, giving you the flexibility to choose based on your business model. Make sure you scrutinize supplier ratings and reviews to ensure you’re dealing with a reputable source.
5. Liquidation and Closeout Companies
Companies like Bulq or Quicklotz specialize in purchasing large lots of surplus or returned merchandise from retailers and selling it to smaller businesses or individual consumers.
Such companies are a reliable source for pallets, as they handle the sourcing, sorting, and grading, providing you with a clear understanding of what you’re buying.
6. Social Media
Platforms like Facebook Marketplace and Craigslist often host listings for pallet sales. Sellers range from individuals looking to unload a single pallet to businesses offering pallets regularly.
Normally, you just interact with sellers, ask questions about the pallet contents, and if possible, inspect the pallets before purchasing to ensure the quality of your investment.
7. Network with Other Flippers
You want to cultivate relationships with others in the pallet flipping business can be invaluable. Other flippers might share their experiences, giving you insights into reliable pallet sources, best practices, and pitfalls to avoid. Networking can happen online in forums and offline at local auctions or industry events.
How Much Money Can You Make Reselling Pallets?
The amount? The things you sell, where you sell them, how much you invest, and your pallet reselling strategy all have a big impact on how much money you may make.
Regarding the type of items, many product categories have varying return rates. For instance, due to demand and perceived worth, branded apparel or technology goods may produce a higher return. If you spend $200 on a pallet of electronics and resell each item for $20, for a total of 30 products, you may earn $600, or a $400 profit.
Where you sell the goods also has an impact on your revenue. Wider reach and demand may be offered by eBay, Amazon, and Mercari. However, local websites like Craigslist, Kijiji, or VarageSale can save transportation expenses and possibly increase selling margins.
Be aware that your initial investment when starting a business selling pallets has an impact. Pallets purchased at a discount may result in a higher profit margin.
Then there is your reselling plan, which needs to be effective in order to boost your profits. Make sure your pricing is effective, market, and provide discounts or bundles for a number of things.
Now, let’s consider an example:
|Cost of Pallet (30 electronics items)||– $200|
|Selling Price per Item||$20|
|Total Income from Sales||$600|
In this scenario, you make a net profit of $400 from one pallet. If you manage to flip one pallet per week, that’s a monthly income of $1,600.
This doesn’t account for possible expenses such as shipping costs, platform fees, or any refurbishing costs if the items are not in sellable condition.
What Pallets to Avoid?
1. Broken or Damaged Pallets
In terms of physical condition, steer clear from pallets that are visibly damaged or broken. These can be unsafe for storage and transportation, leading to potential losses in product quality and safety.
2. Uninspected or Unsorted Pallets
Pallets that haven’t been inspected or sorted often pose a risk because you don’t know what you’re getting. These “mystery pallets” can contain items of little to no value or damaged goods, which would be hard to resell.
3. Oversaturated Product Pallets
Avoid pallets containing items that are already oversaturated in the market. These could include fad items that are no longer in demand, or generic goods that are difficult to sell due to heavy competition.
4. Seasonal Product Pallets (Off-Season)
Seasonal items can be a risky investment, particularly if you’re buying them out of season. For example, purchasing a pallet of Christmas decorations in January may leave you storing inventory for almost a year before there’s demand for it again.
5. High-Value, High-Risk Item Pallets
While the allure of high-value items can be tempting, they often come with increased risk. For example, electronics or designer goods may seem like a sure win, but they also have a higher chance of being returned.
Is Pallet Flipping Tax Free?
Like any other type of business, pallet flipping incurs some taxes. To the extent that it is required by local tax regulations and your location, you must generally declare your earnings from pallet flipping as taxable income.
Pallet flipping entails acquiring goods in quantity, typically on pallets, for a large discount over their retail value. As a result, the products are frequently overstock, returns, or goods that big retailers have written off. Your objective as a pallet flipper is to make money by reselling each of these things separately.
Therefore, when you begin to make money from your pallet flipping business, that money is seen as income. All income must be declared to the tax authorities and taxes must be paid in accordance in many nations, including the United States. You must submit an income tax return if your self-employment net earnings were $400 or more, according to the Internal Revenue Service (IRS).
What Pallets Pay the Most?
When it comes to reselling items from liquidation pallets, it’s essential to know which types of pallets are the most profitable. The amount you can earn often depends on what’s contained within the pallets, as well as their quality and condition. Here’s a breakdown of some high-profit pallet categories:
- Electronics are typically high-value items. Pallets containing TVs, computers, smartphones, tablets, and other electronics often fetch higher prices compared to other goods.
- Just verify their condition and working status, as damaged electronics might result in losses.
Designer Clothing and Accessories
- Brand-name or designer clothes and accessories are a hit in the resale market. While they might require a higher initial investment, the potential profits are also significant.
- You’ll want to ensure the items are in good condition and verify their authenticity.
- Major and small home appliances like refrigerators, washing machines, microwave ovens, blenders, and coffee makers, are always in demand.
- They typically yield good profits, especially when they are new or lightly used.
- Furniture pallets can be quite profitable, especially if they contain high-quality or brand-name items.
- They might require more storage space and pose a higher shipping cost.
- High-end, unused cosmetics can fetch a good price on the resale market.
- Be mindful of expiration dates and check the condition of the packaging to ensure a good sell-through rate.
- Make sure to factor in your overhead costs, including storage, shipping, and listing fees, when calculating your potential profits.
The next step is to wait and see if your investment was lucrative after doing all of the research, planning, and selling.
When flipping pallets, your aim should be to recoup your investment plus an additional 100–200% profit. For instance, if your pallet cost you $134, you would like to profit 100% by earning back that amount plus another $134.
Pallet flipping takes work, but if you’re prepared to invest the time, it might pay off handsomely.
Top Pallet Resell Success Stories
Rob and Melissa Stephenson
The Hustle is a Michigan couple that “flipped” their way to a six-figure income. They began by promoting household things they no longer required. Once they saw the potential, they started purchasing items at auctions and estate sales with the intention of reselling them online. They quickly realized how profitable it was to buy customer return pallets and sell them.
Walter Blake Knoblock
He began by investing £5 to buy books from a secondhand store and resale them on Amazon. He gradually expanded his business to the point where he could buy full truckloads of pallets from large merchants that customers returned for resale. once made $25k flipping pallets from liquidations.
Located in New Zealand, has also been prosperous in the industry. She began by importing large quantities of pallets of merchandise from China and selling them on Amazon. She sold one of her enterprises for more over $1 million after learning the ins and outs of selling on Amazon. She currently runs a program called “Amazon Navigator,” which instructs students on how to create a profitable Amazon business.
In the course of setting up this guide to help you start a pallet flipping business, we have identified the following FAQs (frequently asked questions):
Are liquidation pallets worth it?
Liquidation pallets are useful for obtaining bulk quantities of items to resell, but the downside is the limited choice as you’re stuck with whatever comes in the pallet, even if it’s specific items like clothing.
Are Amazon return pallets profitable?
Purchasing Amazon Return Pallets can be profitable, but there’s no guarantee on the contents. Items may be brand new, broken, spare parts, or even empty-boxed.
How much do Amazon pallets cost?
Prices per pallet can range from $100 to $20,000, depending on item quality and value.