Where Do Bin Stores Get Their Merchandise?

The Supply Chain Nobody Talks About

Every time you pick up a random brand-name item at a bin store for a dollar or two, there's a surprisingly complex chain of events that brought it there. Understanding that supply chain helps you shop smarter — you'll know what condition to expect, why certain categories show up so frequently, and why prices can be so dramatically lower than retail.

The short version: retailers end up with enormous quantities of merchandise they can't efficiently resell, and rather than warehousing or destroying it indefinitely, they sell it in bulk. Bin stores are at the end of that chain.

The Amazon Returns Machine

Amazon is the single largest source of bin store merchandise, and the scale of their returns operation is staggering.

Amazon ships billions of packages every year. Industry research consistently shows that somewhere between 20 and 30 percent of online purchases are returned — a rate significantly higher than traditional retail. Multiply that percentage against Amazon's transaction volume and you get a returns pipeline measured in hundreds of millions of items annually.

When a customer returns an item to Amazon, the company has to make a quick decision about what to do with it:

Option 1: Resell as new. This only works if the item was returned in factory-sealed condition, never used, and shows no signs of opening. A relatively small percentage of returns qualify.

Option 2: Sell through Amazon Warehouse. Items that are functional but show signs of use or have damaged packaging can be listed as Amazon Warehouse Deals at a discount. These are inspected and graded.

Option 3: Send to FBA remanufacturing. For certain product categories, Amazon works with manufacturers to refurbish returns and relist them.

Option 4: Liquidate. Everything else — the returned blender that's missing a part, the shoes that came back with scuff marks, the toy with a torn box — gets liquidated. This is the stream that eventually reaches bin stores.

How Amazon Liquidation Actually Works

Amazon doesn't sell directly to bin store operators. Instead, they work through authorized liquidation platforms, most notably:

• B-Stock Solutions — The largest enterprise liquidation marketplace. Amazon is one of their biggest clients.
• BULQ — A more accessible platform with smaller lot sizes, popular with smaller buyers.
• Direct Liquidation — Works with Walmart, Target, and other major retailers in addition to Amazon.

These platforms run auction-style sales where buyers bid on pallets or truckloads of merchandise. The pallets are described by their manifest — a list of what's supposedly in the lot — though the condition of individual items varies significantly.

What does a pallet cost? It depends heavily on the category and the platform. Electronics pallets auction at higher prices relative to their manifest value (because the potential upside is greater). General merchandise and mixed-category pallets trade at lower percentages. A rough range: buyers typically pay 10 to 35 percent of the total retail value listed on the manifest.

That margin — buying at 10 to 35 cents on the dollar — is what makes bin stores possible. When a store buys a pallet with a total retail value of $2,000 for $400, they can price everything at $5 and still generate significant revenue even if they only sell 60 percent of the pallet.

Retail Overstock: A Different Stream

Amazon returns are the most visible source, but bin stores also stock a significant amount of retail overstock — merchandise that was never returned, just never sold.

Every major retailer deals with overstock. Buyers miscalculate demand. Seasons end. Trends shift. Products get discontinued. The retailer is left holding inventory that's taking up warehouse space and tying up capital, but isn't damaged or defective in any way.

Retailers move overstock through several channels:

Clearance sections are the first stop. Markdowns happen in stages — 25% off, then 50%, then 75%. Whatever doesn't sell in clearance moves on.

Off-price retailers like TJ Maxx, Marshalls, and Ross are a major channel for overstock. They buy unsold merchandise from department stores and brands and sell it at a discount in their own stores.

Liquidators buy whatever doesn't move through clearance or off-price channels, selling it in bulk to secondary buyers including bin store operators.

The economics are different from returns. Overstock tends to be in perfect condition — original packaging, never used, just surplus. But it might be a discontinued color, a seasonal item, or simply a product that didn't resonate with shoppers. You can often find excellent overstock at bin stores because there's nothing wrong with the product at all.

Shelf Pulls: The Best Bin Store Inventory

Shelf pulls deserve their own section because they're among the best merchandise that reaches bin stores.

A shelf pull is a product that was physically stocked on a retail store shelf but never sold. It gets pulled from the shelf to make room for new inventory, seasonal resets, or planogram changes. The product is essentially new — it may have minor shelf wear on the packaging, but the item itself is untouched.

Retailers generate shelf pulls constantly. Every time a store resets a section, updates their product mix, or responds to corporate planogram changes, products come off shelves that still have retail value. These get consolidated and sold in bulk.

For a bin store shopper, finding a shelf pull is finding something close to retail-new for bin store prices. The packaging might have a price sticker or some shelf wear, but the product inside is unused.

What Happens to the "Mystery Factor"

One of the defining characteristics of bin stores is that nobody — including the store operator — knows exactly what's in any given pallet until it's opened.

Liquidation manifests are notoriously inaccurate. They list what was supposed to be in the pallet based on the retailer's system records, but items get mislabeled, consolidated differently, or sorted inaccurately at the retailer level. A pallet listed as "electronics and small appliances" might contain mostly kitchen gadgets and very few actual electronics.

This mystery factor is a feature, not a bug, for the liquidation industry. It allows pallets to be sold in bulk without the time and labor cost of verifying every item. But it also means bin store operators are making calculated bets on every pallet purchase.

Experienced operators develop relationships with specific liquidation platforms and learn which pallet categories tend to deliver better-than-listed goods. They track their cost-per-pound versus revenue and adjust their sourcing accordingly.

Newer operators often struggle with this learning curve, which is one reason newer bin stores sometimes have thinner inventory or less valuable merchandise — they haven't yet optimized their sourcing.

Other Sources: Insurance Claims and Closeouts

Two smaller but notable sources round out the supply chain:

Insurance claims merchandise — Products that were damaged in shipping, floods, or other events, partially compensated by insurance. The product may be cosmetically damaged or missing components but largely functional. Think a speaker with a dented corner or a set of dishes with one broken piece.

Brand closeouts — Brands discontinue product lines all the time. When a company exits a category or updates a product, they liquidate existing stock. These closeout items are often completely new and fully functional — just no longer part of the brand's catalog.

Why Prices Can Be So Low

The economics come together like this: a retailer spent money buying inventory that didn't sell or was returned. They need to recover some capital and clear warehouse space. Selling at 15 cents on the retail dollar is far better than paying to warehouse or destroy the goods.

The liquidator takes on the cost and risk of processing and auctioning pallets. The bin store operator buys at auction, pays for warehouse space and labor, and needs to turn a profit even accounting for items that never sell.

At each step, value is extracted by accepting risk and uncertainty. The bin store shopper benefits from being at the end of the chain — absorbing whatever uncertainty remains by paying a flat rate without knowing exactly what they're getting.

Understanding this chain helps explain a few things you'll observe at bin stores:

• Why electronics are hit or miss: Returns from Amazon often failed to work properly, which is why they were returned. A certain percentage of electronics will be non-functional.
• Why some items look brand new: Overstock and shelf pulls come in untouched.
• Why inventory varies so much week to week: The store is buying from auctions where availability changes constantly.
• Why some stores have better inventory than others: Operator experience and sourcing relationships matter enormously.

What This Means for You as a Shopper

Knowing where bin store merchandise comes from helps you shop smarter:

Look for items with original packaging — these are more likely to be overstock or shelf pulls than returns, meaning they're more likely to be functional.

Be appropriately skeptical of electronics — test anything you can before buying. A powered-on device at the bin is worth far more than an untested one.

Understand that missing parts are common in return merchandise. A blender without a lid or a puzzle with 998 of 1000 pieces is entirely normal given the source.

Seasonal finds are often excellent — brands overestimate seasonal demand all the time, and that perfectly good Halloween decor or Christmas wrapping paper you find in March got there because a retailer bought too much, not because anything is wrong with it.

The supply chain that feeds bin stores is vast, ongoing, and doesn't look likely to shrink. As long as consumers return items at current rates — and there's no sign that's changing — the pipeline from Amazon warehouse to bin store bin will keep flowing.