Costco returns are one of the most popular liquidation loads to source, next to Amazon. For the most part, Costco auctions customer returns and shelf pulls from several distribution hubs across the country. There are a handful of geographic areas in which Costco solicits contract bids to take customer returned merchandise. These contracts are strict in that the salvage buyer must take any and all returns regardless of the weekly quantity.
Costco Returns – Fast Facts:
- Costco does grade return loads based upon condition, A being better quality than B
- Costco does offer smaller loads of 2-5 pallets of returns through their auction marketplace.
- Contracts to purchase Costco returns are awarded to salvagors (you or I) for a specific amount of time, i.e. six months to one year.
- Those that are awarded a customer return contracts must purchase all available returns on a weekly basis. Failure to do so will result in termination of the salvage contract.
- Due to the sheer volume of Costco returns a single store might have per week, the liquidation buyer must have a large warehouse to handle the large loads consistently. My estimate as to the average number of pallets per week, per store, would be 15-20 . Of course this will vary depending on store location, population size of surrounding area, and other factors such as the holiday season where store sales double if not triple.
- Expect to receive any kind of store merchandise in a return load, from food to clothing and anything in between.
- Contracts to buy returns are often coveted and because of this, individual salvage buyers/companies do not let their contracts go. Bottom line, store salvage contracts are not easy to come by.
- A lot of companies engaged in buying Costco customer returns hold multiple location contracts.
For the reasons stated above, customer returns from Costco direct are often out of reach for most small liquidation buyers. For those just starting out or for those without a lot of capital, the only other way to source Costco goods is from someone (or some company) that holds current salvage contracts with Costco.
Please be aware: the world of liquidation product sourcing changes all the time. The above information is from my own direct knowledge, and may have changed since last I heard. If anyone out there has different information about sourcing Costco returns, please contact us or leave a comment below. Happy liquidation buying!
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