What Does Costco Do With Unsold Appliances And Kitchenware?

Costco moves a lot of merchandise and is always bringing in new deals. If something's about to leave the sales floor, you'll know it because of the Costco "Death Star" symbol, a clever mark the chain uses to signal a product won't be restocked anytime soon, if ever. But items don't sit there forever, taking up space without making money. So, what does Costco do with all its unsold appliances and kitchenware? It still sells them — just not at the store. The company uses a third party liquidation website called B-Stock to auction things off. As the store has quite the generous returns policy, returned Costco household items in good condition do occasionally go back on the shelf; however, those with damage or high-use will end up at these auctions, too.

In fact, B-stock does auctions on member returns, excess inventory at the end of the season, and things called "rare shelf pulls." This third category is items that the store deemed unsellable to its customers, new or returned. However, it will make them available to liquidators with the caveat that they might be damaged or have parts that are missing. This system helps Costco keep its salesfloor fresh. New inventory can cycle through quickly, but the chain won't take a loss on anything that doesn't sell, as there is a secondary business market ready to pick up the slack. 

Not everyone can participate in these Costco liquidation sales. They are geared towards other business owners, although technically the public can participate by jumping through a few hoops. You have to submit an application to become an approved buyer through B-stock. If you are an American, you have to have a resale certificate from your state to complete your application. To obtain one, contact your state's Department of Revenue. Through applying for one of these certificates, you will also receive a sales tax number, also known by other names in different states, including business tax ID number, seller permit number, among others. Whether you are an American or international buyer, you also need to have an American shipping address because B-stock doesn't send Costco inventory internationally. 

In addition, the inventory isn't sold individually like what's new at Costco. There's no blender here or a dishwasher there. Instead, it's sold in pallets, or larger groups of pallets (called lots), so you are still getting the wholesale experience. In some cases, you might run across a small pack, which is a group of items smaller than a pallet. The auctions take place daily for approved buyers only from 14 locations in the States, including multiple locations in California and Texas. B-stock recommends shopping at auctions closer to you to save on shipping. However, you are not allowed to resell anything you buy from these auctions within five miles of a Costco, lest you become competition for them.