Jaw-dropping inventory buildup

The Covid-related shipping backlogs caused a mismatch in what arrived at warehouses and what consumers want to spend money on right now. Part of the problem is seasonal mismatch and the shift of consumers from goods to services spending as we all move out of lockdown into normal life. Part of the problem is inflation, which forces consumers to spend more on housing and energy and less on discretionary spending. Part of the problem is due to an incredible amount of returns.

The scale of the inventory build-up is truly jaw-dropping. Retailers have to move out this old inventory to make room for new seasonal inventory.


**Retail’s ‘Dark Side’: As Inventory Piles Up, Liquidation Warehouses Are Busy**

**Consumers are buying fewer discretionary goods and returning more. To clear their shelves, retailers are selling to liquidators at steep discounts.**
**By Michael Corkery, The New York Times, July 30, 2022**

**... In a giant warehouse in northeastern Pennsylvania, there are shiny new Huffys and Schwinns available at big discounts. The same goes for patio furniture, garden hoses and portable pizza ovens. There are home spas, Rachael Ray’s nonstick pans and a backyard firepit, which promises to make “memories every day.” The warehouse is run by Liquidity Services, a company that collects surplus and returned goods from major retailers like Target and Amazon and resells them, often for cents on the dollar. ...**

**In 2021, shoppers returned an average of 16.6 percent of their purchases, up from 10.6 percent in 2020 and more than double the rate in 2019, according to an analysis by the National Retail Federation, a trade group, and Appriss Retail, a software and analytics firm.**

**Last year’s returns, which retailers are not always able to resell themselves, totaled $761 billion in lost sales. That, the retail federation noted, is more than the annual budget for the U.S. Department of Defense. ...** [end quote]

Gasp! That is truly jaw-dropping! And that’s only returns. It doesn’t include the inventory buildup caused by the supply-chain delays.

I shudder to think about the incredible amount of loss and waste. Retailers are suffering serious blows. Amazon, Walmart, Target … all the retailers … are losing share value because of this.

As a consumer, I wish that I could access some of this discounted inventory. The warehouse described in the article is only accessible to locals.

I bought an Amazon Fire TV Omni on Prime Day which was discounted from $405 to $245.

Any ideas?




Any ideas? Sure!!!

I retired from TJX - Probably the premier “opportunistic” merchandising company globally!!

I can assure you, you will be seeing this merchandise in Marshalls, TJMaxx and HomeGoods shortly!
TJX buyers/merchandisers are trained to seek out these deals across the globe. They are also trained to establish a great relationship with their vendors in order to “get the call” when merchandise needs to be liquidated. TJX often offers Cash on Delivery and does not quibble with little things. They come in, view the merchandise, and usually make an offer and sign a deal on the spot. I went on a week-long buying trip with a senior buyer once and it was quite an experience for me to witness.

You should go “treasure hunting” in one of the TJX brand stores!!



They do tell us that in the era of buy on line, many order several to see if it fits or goes with their wardrobe etc and return the others. Some retailers are starting to charge for returns.

Most do not resell returns. Instead they send them to companies that specialize in returns. Many end up on ebay. Or go wholesale to retailers that specialize in those products. I recall specials on cat food at Dollar General that turned out to be past the date on the package. Outdated and out of style merchandise has to be a specialty area.

It’s not in the wheelhouse of companies that move big volumes of merch to take them back one by one, open the package, make sure all the accessories are there, make sure it isn’t scratched, etc, so they take container loads full and sell them for a few cents on the dollar to people who will deal with this kind of stuff.

I’ve bought a half dozen Roombas over the years on eBay. I look for somebody who has multiples of the same item. That tells me that they’re a re-seller for that line (in this case Roomba) who takes their returns and sells them off one by one. The price is always at least half, often one-third retail, and I have yet to get a bad one. They’re always in original packaging, pristine, returned for whatever reason and dumped into the “return” channel.

(In case you’re wondering, we have what is called “a basement rancher”, two stories, very long and narrow. We run 4 Roombas daily. We also have four cats and a dog, and the little vacuums are full every day. The pet hair contributes to a shorter than normal life, probably.)

I don’t use eBay a lot, but this is one way I look for bargains.