As Inventory Piles, Clearance Warehouses Are Busy

“It’s unprecedented,” said Chuck Johnston, a former Walmart executive who is now chief strategy officer at goTRG, a company that helps retailers manage returns. “I’ve never seen the pressure in terms of excess inventory like I see it right now.”

So much of the wreckage and debris from industry ends up in warehouses like this one, located on Interstate 81, just a few exits from the President Biden Highway in Scranton, the president’s hometown.

The giant facility is part of an industrial park that was built on top of an open-pit mine dating back to when this region was a major coal producer. Today, the local economy is home to dozens of e-commerce warehouses that span the hilly landscape like giant spaceships, ferrying goods to population centers in and around New York and Philadelphia.

Liquidity Services, a publicly traded company founded in 1999, decided to open its new facility as close to major Scranton-area e-commerce warehouses as possible, making it easy for retailers to dispense with their unwanted items. and returned.

Even before the inventory glut emerged this spring, returns were a major issue for retailers. The huge increase in e-commerce sales during the pandemic – increasing by more than 40% in 2020 compared to the previous year – has only added to this.

The National Retail Federation and Appriss Retail calculate that more than 10% of returns last year involved fraud, including people wearing clothes and then sending them back or stealing goods from stores and returning them with fake receipts. But more fundamentally, industry analysts say increasing returns reflect consumer expectations that anything can be taken back.

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