Liquidation Key Terms

Understand liquidation key terms to know the legal aspects

A liquidation involves the selling of assets at a loss, which means the company must sell the product at a price lower than the price it cost to purchase the item. There are different types of liquidation sales, and the type of liquidation often depends upon the products. When you look into liquidation, you can look at companies that specialize in selling assets, companies that purchase liquidated inventory or companies that have recently liquidated their inventory.

 

Closeout

When the inventory reaches a point where it is no longer of any value to market the products, a business is at closeout. The remaining product becomes known as closeout product, and a company may sell off the closeout product to another business.
Try: Wholesale611.com provides a further look at the term closeout.

Assets

In a liquidation, most businesses sell off assets. These assets include any item with economic value. Even assets sold at a loss have some economic value.
Try: InvestorWords.com provides an in-depth definition of assets and offers examples of what assets can be.

Creditors

When a business liquidates its assets, it is usually to pay off creditors. A creditor is any person or business organization, such as a bank or vendor, to whom a business owes money.
Try: Investopedia ULC defines creditor and explains how creditors can benefit from liquidation.

Manifest

A manifest is a detailed list indicating the items included in a liquidation. Most liquidation companies consult a manifest to determine the value of purchasing the liquidated items.
Try: Read Step 3 in the guide provided by GENCO to determine the best way to use a manifest. The guide offers a description of the things you should find on the manifest.

Shelf-pull merchandise

Shelf-pull merchandise refers to products pulled off the shelf, where they were sold at regular prices, and sold at a reduced rate. There are many reasons for this, and often you can find shelf-pull merchandise that is new, under warranty and still in the original packaging.
Try: Wholesale-Secrets.com takes a look at how wholesalers can profit from shelf-pull merchandise.

Overstock

Occasionally, a liquidation clears the inventory of overstock products. Most overstocks occur when a company makes more products than it can sell at the current price. Overstocks can also happen when a company buys more items than it can sell.
Try: Coast 2 Coast Wholesale defines overstock merchandise as it applies to liquidation.

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