On a bright but chilly Saturday, the parking lot at Ollive’s Auction in Calgary is bustling with a constant stream of customers arriving to pick up the treasures they won the previous week.
Among them were a $7 vacuum cleaner, an $11 hair dryer brush, and two $13 tricycles at heavily discounted prices.
“I don’t want to advertise this place because it’s a gem,” said shopper Pat Knecht, picking up a vacuum cleaner along with a lamp, some storage bins, and 12 picture frames. You can get information.”
Items on Ollive’s Auction can be found at deep discounts because they’ve likely been purchased once and returned. This business is his one of a growing number of auction houses that have come to sell returned and surplus items.
This business area grew as online shopping and online returns became more popular than ever. 30% About 30% of online purchases end up being returned.For retailers, return shipping, processing, and restocking prices are suddenand liquidation is one way to deal with it.
With Black Friday officially kicking off the holiday shopping season, these auction houses offer a glimpse into where some of these returns will end up.
‘I don’t know what’s coming’
Inside Ollive’s Auction’s nondescript brick exterior is a nearly 5,000-square-foot warehouse filled with everything from floor-to-ceiling diapers to paddleboards to electric car chargers .
The business loads a truck with about 24 skids worth of product every other week. We have a mix of online returned items and unsold old items being put away for new ones.
Owner Wayne Ollive works with a national clearing house that sources returns directly from retailers. He chooses how many tracks to order, but the rest of the process, he said, is just rolling the dice.
“You never know what’s coming in,” says Ollive. “It’s like Christmas for the staff when you have the skids open because you never know what might happen.”
It’s difficult to pinpoint exactly what portion of returned or surplus items will end up being auctioned or more broadly liquidated, but retail consultant Sonia Lapinski said retailers are likely to It said it may be happening more frequently as it deals with the “excess” of inventory from its previous supply chain. It is also affected by the growing tendency of customers to purchase and return excess merchandise.
“In the last few months, I would say we’ve let the liquidator take over a lot more than usual,” said Lapinski, managing director of the retail division at global consulting firm AlixPartners. . She’s based in the US, but she says she sees similar trends in Canada.
Liquidation has become a popular option for retailers working on returns online, but Lapinski said it’s not always the most profitable.
“The liquidation route will actually destroy the commodity itself, as well as a lower level of margin.”
Amazon Canada told CBC News in a statement that it decided to resell most returns and ship them back to suppliers and sellers, or donate or recycle them.
“Do you want to be in the returns business?”
Ollive’s Auction is something of a newcomer to the Calgary retail return auction scene, having been around for about a year and a half (although Ollive himself has been participating in auctions since the 1980s).
Other Calgary businesses also said they are selling returns online.
A 10-minute drive away is Reed’s Auction Canada, which has been held for over 30 years. According to owner Joe Hajas, in recent years the focus has shifted from selling consignment products, such as restaurant closures and bankruptcies, to returns, which now make up about 80% of the business.
“It really picked up just before COVID,” said Hajas, who buys one or two trucks a week, many of which come from Amazon.
“We basically had the liquidator call us and say, ‘We have extra trailers. Told.”
A player with a longer history in Calgary is Graham Auctions, founded in 1992. the market itself As one of the most established liquidation auctions in the country.
The business began in more traditional vehicle, salvage and consignment auctions, but about 15 years ago it got into the returns game at one high-profile “major retailer,” said general manager Mike Orechow. says. which one.
The business now receives four to five truckloads of miscellaneous items daily, ranging from blankets to rugs to tools, and auctions 4,000 to 5,000 lots a week, Orechow said.
Orechow, who also auctions new but unsold items, including canceled online orders and items with damaged packaging, said:
Meanwhile, auctioneers say their customer base has also grown as sales have moved online and auctions are no longer limited by the size of a building or the number of people participating in direct bidding.
Reid’s Auction’s Hajas said that in the past, “80 customers attended live sales.” But now, “online sales he’s getting 400-500.”
With the cost of living rising, and despite the risks associated with buying second-hand goods, bidding at auctions is a rare opportunity for customers to choose what they want to pay for.
“Outside the auction world, you can’t just walk into your local Gap and negotiate a price or something like that.
“I think most people in the auction world are thrifty…you are trying to save money because times are tough and it is not easy.”
Others see this business model as a way to keep items out of landfills and mitigate some risks. Environmental costs of returnsThat said, Hajas said he had mixed feelings when he saw firsthand how much of it would end up being sent back.
“It shows what people do, how they buy wedding dresses and then return them after they’ve been used, or how they pick up tools and destroy them and return them anyway because they don’t care,” he said. rice field. .
“We are only pushing the problem forward, we are not mitigating it.”
See | Actual Destinations for Online Returns:
Still, business at all three auctions is strong enough and expansion is underway. Orechow recently opened an in-person clearinghouse, Hajas opened a similar pop-up, and Ollive said he wants to launch his second auction venue.
He expects demand to increase in the coming weeks.
“It’s probably the busiest time of the year because of the Christmas season,” said Olive.