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Target Stores and Liquidation Inventory Pallets or Truckloads

Types of Liquidation Inventory

Companies liquidate a wide variety of things, including inventory and fixed, capital assets.  In terms of inventory, you can generally classify liquidation inventory into several categories:

Overstock:  Overstock inventory is brand new inventory that a company has determined it must sell for one reason or another.  Typically, this is because they have either over-bought or under-sold their projected volume.  At some point, companies must move out the old overstock product to make room on store shelves and warehouse shelves for new products.  It might be the newest models of electonics or next season's apparel.  The price of overstock liquidation product is typically the highest because it is in brand new condition and can immediately and easily be resold by they buyers.

Customer Returns:  Retailers and manufacturers receive customer returns all the time.  With more and more liberal return policies at retailers like Costco and Walmart, consumers take the liberty of returning products for virtually any reason.

  • Refurbished Returns:  Some returns will be refurbished by the retailer before being liquidated.  Depending on the product and the amount of repair needed to put it back into 'like new' condition, retailers have figured out that they can invest $x/unit but then resell for $x+$y/unit because the products are in resellable condition.
  • Unrefurbished Returns:  As the name implies, these are returns that have not been refurbished.  Also known as raw returns, often these loads will be palletized as they came back to the retailer.  Typically, the retailer will want to 'touch' the units as few times as possible if they don't intend to refurbish them.  Every touch adds cost to the product and increases the loss they will incur on the inventory.  Unrefurbished returns will always be less expensive.

End of Life:  This inventory category consists of products that a manufacturer is phasing out of production.  Most likely, they have introduced a new model.  It is similar to overstock inventory in that the product is typically in new condition, however, it is likely older and it is almost certain to have been made obsolete (or at least less desireable) by the introduction of the next generation model.

Here is an estimated breakdown of the liquidation market size from several years ago across the US and EU markets.

  Liquidation Inventory Types