Common Closeout Liquidation Words and Terms Defined

When you first start dealing with wholesale liquidation, you may get a little confused by some of the terms that are commonly used. While most wholesale liquidation merchandise is usually sold in the same manner, the types of merchandise will differ. Here are some of the common terms that you may want to remember.

Liquidation – The common term used to describe all merchandise that is sold off quickly or liquidated at extremely low prices. Companies usually liquidate merchandise to get rid of it in a timely manner. Some companies liquidate merchandise to help them pay off an immediate debt.

Overstocks – Overstocks happen when a manufacturer produces more product than what is needed for their customers. These products are usually brand new and are in perfect condition.
Surplus – Products that a company can no longer sell at retail value or are discontinued. Most of these products still have value and can easily be resold to the right customers by the person who buys the surplus.
Salvage – Salvage is usually used as a synonym for terms like “liquidation” and “surplus”. However, some companies use this term to describe merchandise that is left over after all the good merchandise has been picked out. Some of this merchandise may even be broken or useless.
Closeouts – Products that were manufactured in the previous season and need to be cleared out to make room for this year’s inventory. Many name-brand companies have billions of dollars worth in closeouts that are in perfect condition.
Shelf Pulls – Shell Pulls are products that were placed in a retail store but need to be cleared out to make room for new inventory. These products usually have little or no damage.
Customer Returns – Any product that is returned by a customer for a number of reasons. Some products may be unopened and were returned because the customer changed their mind. Others may have been opened, used, or even broken.
Refurbished – Products that were broken or returned by a customer, broken in the store, or broken during the manufacturing process that are fixed and reconditioned. Refurbished products are basically brand new products that usually have small signs of usage on the case.
Floor Models - These a products that were used as a display model but are usually in perfectly good working order. Many would consider floor models as “slightly used” while others are brand new. For example, products such as vacuum cleaners are usually taken out of their box so the customer can get a good look at it while a digital camera display is used so the customer can use it and test it out.