A salvage pallet, or a return pallet, is a pallet load of goods that customers have returned. Often these items have been used only slightly, but they can't be put back on the shelves and sold as new. So retailers, such as the warehouse giant Costco, will sell these goods to other distributors at a fraction of the price. If you want to buy these pallets from Costco, and you want to get them cheap, then there are several steps you need to take as a business owner.

1. Contact Your Local Costco Store

Identify yourself as a liquidator or salvage company, making your intentions clear, and ask to speak to the RTV (return to vendor) manager or the receiving manager. These are the people responsible for what happens to products that are returned.

2. Set Up a Meeting with the Manager in Charge of Salvage

You need to set up a meeting with the manager of salvage to explore the possibility of a business partnership. Every retailer needs to move their salvage stock. Find out what the goods usually sell for. Typically, you can expect to pay 28 to 35 percent of this price. Find out also if the returned goods are sold "first-come, first-serve" and if there are any minimum purchase requirements.

3. Meet with All the Local Costco Stores

Go meet with all the local Costco stores and managers to see where your best opportunities are. While Costco stores are owned by the same corporation, there is typically a little bit of variability between stores and that can work to your advantage. Remember, also, to check any requirements for collecting the goods, such as particular days and times.

Tip

Corporations like Costco don't extend credit to buyers. Make sure that you have the money to pay up front either in cash or on your credit card. Make sure to check in advance which credit cards the company will accept. Costco, for example, only accepts Visa.

Make sure that you can pick up what you buy. If you purchase 20 pallets of merchandise, ensure that when you go to pick it up you have a truck capable of hauling it all away, and enough helpers to load it quickly. If 20 pallets are purchased within a 48-hour period, Costco Wholesale offers a Truckload Discount Savings program.

Create an online account with Costco Liquidation Auctions and become an Approved Buyer. You will need to attach your reseller's certificate and Costco will notify you within one business day if your account is approved. Auctions can be posted any time during normal business hours. Once you are an approved buyer, you can go to any auction inventory page, follow the bidding instructions and enter the highest amount that you are willing to pay. Subscribe to the Costco Liquidation Auctions newsletter to receive an email when auctions are opening and closing each day.

Warning

Like any partnership in business, it's important to be upfront. If Costco asks to see your business license, tax information, sales records and other facts and figures, make sure you can provide them. You need to be able to sell yourself as a good investment in order to form a good working relationship.