Just what is liquidation merchandise anyway?

When I use the term liquidation merchandise I am referring to one of the following categories or descriptions wholesale merchandise:

Retail Returns

Just as the name implies, retail returns are items that have been purchased by an end user and then returned to the original store for refund or exchange. Returned items usually will have some issues ranging from damage to missing pieces. Incidentally, some items are returned to the original store after an impulse purchases and/or a “changed mind”. In the liquidation industry a returned item that shows little to no damage is considered a “Cherry”. This is where the phrase “Cherry Picked” comes from.

Closeouts

This category of merchandise is comprised of items that are being “closed” out and no longer sold. Can also represent items which are no longer be produced and/or manufactured therefor remaining stock is sold just above cost or in some cases below cost to make room for new inventory.

Salvage Merchandise

Refers to merchandise that is in a form of distress. Salvage merchandise can refer to items that have been damaged in transit, such as an overturned truck or possibly been exposed to flood or suffered smoke damage. Often salvage merchandise is liquidated by insurance companies who are trying to recoup dollars from an insurance claim that has been settled.

Canceled Orders

Large chain stores will set specific requirements for vendors who supply merchandise. For example, a large big box chain store might cancel an order from a particular vendor who cannot meet contract delivery deadlines. Rather than warehouse a large canceled order, a manufacturer might liquidate stock to recover costs.

Overstock

Items which are being liquidated due to a surplus quantity, which cannot be sold or moved quick enough. Retailers will liquidate overstock to make room for new merchandise.

The above categories of merchandise can be purchased well below wholesale pricing and represent an excellent way for store owners, flea market vendors and eBay auction sellers to stock name brand items. They key to success in purchasing liquidation merchandise is finding reliables sources.

If you can buy below wholesale you will be able to offer name brand merchandise at competitive pricing. Liquidation merchandise can prove to be very profitable for anyone engaged in retailing.