Understanding merchandise condition

Seems like every trade or profession in the world has its
own unique set of technical jargon and yes the liquidation industry is no
different. While there are a plethora of terms regarding everything from
shipping to payments we are going to address today the various terms for
category conditions.

Closeouts – Excess
merchandise from either a retailer, wholesaler or manufacturer. Typically these
goods never made it to a retailers shelves so condition would be equivalent to
straight from the manufacturer with all original tags, packaging
and with minimal defects.

Shelf Pulls – Merchandise
that was previously offered for sale by a retailer that were not purchased.
Typically this is premium grade merchandise items will have their manufacturer
tags and packaging and have a minimal amount of defects. Fox Liquidation’s
standard defect rate on shelf pull lots is 5% or less, anything exceeding this
threshold would be issued a store credit.

Customer Returns 
items that were offered for sale by a retailer that were returned. This
merchandise is generally in mixed condition. Items may or may not have tags or
packaging, may show signs of wear, use or be damaged or missing pieces. Fox
Liquidation’s average rate of defect with customer return lots is between
20-30% this is a general guideline lots can have a lower or higher rate of
defect it varies lot to lot.

Refurbished 
Commonly found in electronics and hardware categories these are goods that have
been tested and repaired to restore them to good working order. These items are
generally not in original packaging but are repackaged into generic
packaging.

Salvage – This
lower grade merchandise consists of either damaged or customer return items
that can no longer be sold as new merchandise. Probably one of the riskiest
grades of merchandise items may need repairs or can only be used for parts.

Defect rate 
Refers to the average percentage of damaged or distressed merchandise for a
particular category of merchandise. There are no set industry standards so if a
wholesaler or liquidator does not explicitly list this it’s always good to ask.
Bear in mind if it sounds too good to be true then It probably is. If you are
being offered a shelf pull lot with a 15% defect rate chances are it’s not a
shelf pull lot but a customer return lot. Alternately if it’s a customer return
lot with a 5% defect rate the sirens should be going off because this sounds
like a scam. 

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