Liquidity Services- February 14, 2013
From flat screen TVs and tablets to laptops and smartphones, we are a society consumed by gadgets. During the 2012 holiday season, consumer electronics were the most wanted gift in a national survey — ranking ahead of even money, peace, and happiness! More than a third of adults purchased a gadget as a gift this year, spending an average of $252. That’s a lot of electronics unwrapped this holiday season! 1
But what happens after these gadgets are purchased, gifted, and opened? Much to the chagrin of retailers, between 11 to 20% of the millions of consumer electronics items purchased weekly will be returned to the store. 2 At that clip, consumer electronics have the highest return rate of any product (even above apparel). And it’s costly too. In 2011, consumer electronic returns cost retailers close to $17 billion. 3 You may be asking yourself why the return rate is so high for popular gadgets. As it turns out, patience is a virtue.
Most gadgets returned to the store actually work exactly like they are supposed to, but are brought back due to… impatience. Yes, most of those people returning gadgets have spent an average 20 minutes 4 trying to figure out how to work a gadget before giving up, getting frustrated, and returning it to the store or online outlet they purchased it from. Another factor for returning a product is buyer’s remorse. While it is easy to impulsively buy a gadget in the store, guilty feelings often bring someone back into the store. Whether it’s buyer’s remorse or product frustration, billions of dollars of consumer electronics merchandise are coming back to retailers in functionally and cosmetically perfect condition.
Unfortunately for retailers, these items can’t be put back on shelves and sold at original MSRP. Even if the package was simply opened, the item can’t go back on the shelf to be resold as new to another consumer. So what’s a retailer to do in order to obtain the most value for these returned items, while clearing shelf space for new items that can be sold at the highest price? Many retailers turn to the secondary marketplace and businesses like Liquidity Services that offer a multi-channel sales approach to move the inventory quickly and help the retailer achieve better recovery values.
Millions of consumer electronic items — ranging from Apple iPads to HP laptops to Toshiba HDTVs and Acer Tablets — are being shipped daily to four nationwide surplus warehouses to be sorted, tested, and repackaged for resale via Liquidity Services-operated sites like B2B channels Liquidation.com and Liquidation.com DIRECT, B2C siteSecondipity.com and stores on eBay, Amazon.com and numerous other direct-to-consumer sites. Through this multifaceted, efficient, and proven sales approach, retailers are able to get the most return on their returns, some as high as 90% of retail. That’s a big return if you consider that it would have been sold in the store at a much larger discount than 10%. In turn, buyers — ranging from small business owners to end users — are able to get great deals on quality consumer electronics that have been tested for accuracy or restored to perfect working condition based on original manufacturer specifications. It’s a win-win for everyone.
So, if you’ve ever wondered where that HDTV or laptop you returned to the consumer electronics store ends up, now you know.