A seller of small home goods wrote to us last week: sixty returns had arrived at a warehouse in Los Angeles, every buyer had written "changed my mind", and the seller wanted to scrap the lot and move on. Our answer was to wait one day. Grading comes before scrapping, and in that batch more than half the units were sellable within a week.
Returns look like a cost line. Graded properly, they are stock that happens to be in the wrong place.
The first 48 hours set the cost of everything after
- Count and check the outer condition: how many units, is the carton intact, is the seal unbroken, does the serial number match the record.
- Photograph three things for every unit: the outside, the label, and the defect up close. Claims and resale both depend on these three frames.
- Decide the grade. Everything downstream — labour, storage days, resale channel — follows from that single decision.
Three grades, three costs
| Grade | What it looks like | What happens next | What it costs |
|---|---|---|---|
| A | Factory seal intact, or opened and clearly unused | Back to the shelf and back on sale | Put-away only, no rework |
| B | Carton damaged, manual or accessory missing, wrong label | Relabel, repack, clean, then back on sale | Per-unit rework fee |
| C | Functionally broken, major parts missing, hygiene goods that cannot be resold | Harvest parts or destroy | Teardown or destruction fee, plus a certificate |
The seller sets the standard, not the warehouse
Give the warehouse a written checklist: was it opened, are there signs of use, is the accessory set complete, what did the function test show. A warehouse left to judge on its own will grade generously on cosmetics and badly on function, and the argument arrives with the invoice.
One clause worth adding to the storage contract: a disputed unit must be graded within 48 hours, and if no verdict arrives in that window it is treated as A. That single line protects the seller from stock quietly drifting into the scrap pile.
Where the stock goes after grading
- Back on sale. Return to FBA, to your own store, or to another marketplace — the cheapest route when the grade is A.
- Bulk liquidation. A buyer takes the lot at a discount and settles once. Right for the edge of B and most of C.
- Destruction. Ask for the certificate every time; batteries and liquids are priced separately and some states require a licensed handler.
- Back to China. Only when the unit price is high, the item is repairable, and the volume justifies the freight. This is the exception, not the default.
Three habits that cost money
- Writing the whole return off as a loss on day one, when grade B still sells — just more slowly.
- Counting the rework fee but not the storage days the unit spends waiting for a decision.
- Letting the warehouse decide whether an item is sellable, and finding out at the invoice.
Five things to file before the first shipment
- The grading checklist, per SKU or per category.
- The photo standard: three frames, same angle, dated.
- The instruction for each grade: resell, rework, or scrap.
- A signed destruction authorisation, so nobody waits for an email at month end.
- The threshold above which a unit is worth sending back to China.
A plain note from the desk: a return is not a verdict, it is a parcel waiting for one. The warehouse can only follow the standard you give it.
Tell us the category, the number of units and the warehouse on WhatsApp, and we will come back with a grading plan and a rough per-unit cost before the next batch lands.