Although my wholesale and closeout products are primarily brand name
overstock and high quality department store returns, it's important
anyone involved in this business to know what salvage merchandise
Wholesale salvage merchandise is a product category used in the
wholesale and closeout business to refer to merchandise that has
either been damaged, or has been exposed to a situation in which
the potential for damage is high. Salvage is a term that was first
used to refer to products that were transported on trains that
derailed. For instance, if a train was transporting a container of
electronics, and a derailment took place, the insurance company
would pay the owner of the load for the damaged electronics. The
insurance company would then take possession of the damaged
merchandise and dispose of it through wholesale channels. A salvage
buyer primarily purchases inventory that could have become
distressed due to an accident, fire, or flood. While the salvage
buyer can purchase this type of inventory for literally pennies of
the original wholesale cost, he must sort the products out and try
to repair any damaged merchandise.
The salvage category is appropriate for a retailer that has access
to consumers that can tolerate slightly damaged merchandise in
exchange for the implicit savings. A salvage reseller should
consider purchasing items where the potential for damages is
diminished. For example, a television has a much greater change of
being damaged if a truck transporting it crashes, than a pair of
jeans would. And because it is much easier to sew clothing than it
is to repair general merchandise, most experienced salvage buyers
will prefer to focus on apparel, and soft goods for that matter.
Because of the nature of this wholesale category, it is imperative
that buyers inspect the goods in person, so that they can ascertain
what percentage of the inventory can be sold as is, and the cost
involved in repairing any damaged items. If an inspection is not
possible, the buyer would want to obtain a low enough price that
will mitigate his risk in making a purchase sight unseen.
For example, a truck delivering pallets of wholesale
Steve Madden shoes gets into an accident.
The insurance company pays the owner of the wholesale Steve
Madden for their value, takes possession of the shoe pallets,
and then sells them as salvage to a closeout warehouse.
Depending on what damage the shoes sustained, the
Steve Madden footwear might or might not be
suitable for retail sales.
Salvage merchandise is often exported to
third world countries, or is sold as is
at flea markets throughout the United States,
such as in the Queens Aqueduct Flea Market.
Many retailers will try to repair the
merchandise and introduce it as refurbished goods.
A seller should always disclose if the
merchandise has been refurbished.
Another option is to sell damaged products
for parts or material, assuming the
parts and material can be used.
This is a very tough category
to be involved in, and I personally
would not recommend buying or selling salvage goods
unless you have experience in this category,
or can work with someone that has experience.