Returned goods are a problem for retailers, resellers are cashing in

The challenge of returns is not unique to the United States. Amazon sees more product returns in India than it sees in any other market where it operates, Dharmesh Mehta, vice president of consumer and brand protection at Amazon, told Indian daily Economic Times.

In India, Walmart-controlled Flipkart launched 2Gud, a secondary marketplace that sells refurbished and used items, in August this year to tackle the problem. Amazon India also sells refurbished items. Marketplace B-Stock works with businesses in 130 nations, it said.

Meanwhile, a growing number of people are hopping onto the bandwagon, and trying their luck at selling items on mainstream shopping portals. Dallas-based Jordan Kilburn, who quit his job early last year to become a seller on Amazon, said that the resale business — especially on Amazon and eBay — has picked up at a tremendous pace in the last two years. He did not offer any figures, however.

Kilburn said it was partly due to viral videos on Alphabet’s YouTube from first-time users who share their excitement over buying pallets of random returned items from liquidation websites. Many of them even try to sell those items back on Amazon and eBay, he said, adding that it helps that the two e-commerce giants maintain easy terms when signing up new sellers.

Amazon and eBay did not respond to CNBC’s request for comment on this story.

Larry Lubarsky, who said he started selling items on Amazon in 2014, has shared his journey on YouTube and Facebook, where he documents the growth of his business and shows newcomers the ropes. He claims to have made $18 million in gross sales last year alone.

Colorado State University’s Rogers cautioned, however, that average consumers often do not know they are buying old items. Amazon, for its part, says it labels used items as such on its site.

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