Understanding a Customer Return Liquidation Manifest

January 11, 2023

Auctions for liquidated merchandise are treasure troves for resellers, and they see it as an easy way to earn more profit for their businesses. They can buy branded items at deep discounts and resell them for significant markups.

But one of the main challenges of joining these bidding wars is that it can be difficult to determine which liquidation pallets are good deals for resellers. If you’re new to the world of liquidation, you may need to take some time to carefully consider the included items, their prices, and whether or not you can resell them to your target market.

This is why it is essential to read and understand the liquidation manifest. It lists the item’s description, quantity, payment terms, and other pertinent details that buyers need to know.

Even if you’re buying $100 wholesale pallets, you need to be sure you are getting your money’s worth and more from the merchandise you purchase. This guide breaks down each detail you will see in a liquidation manifest and how determines if the pallet is worth bidding on.

What Liquidation Manifests Contain

No two manifests are identical, but there are similarities that buyers and sellers will see.

Here are some of the terms and codes often used in liquidation manifests and what they mean:

Pallet Number

This number identifies a particular pallet that is for liquidation from a retailer.

Item Number

This identifies every item in a particular pallet. It could be a stock-keeping unit number (SKU), a retailer model number, or a number assigned by the liquidator.

In the manifest, it serves to identify the actual product line of the merchandise. If you enter it on an online search, put the numbers in parenthesis, and you will see more information about the products, including features and pricing.

Item Description

This phrase describes the item. Details may include brand name, product number, and unique features.

A simple description could be something like: “Philips 19’ LCD TV.” You can look this up and compare current market prices, features, and current demand to determine if it is a product worth purchasing.

Quantity

This indicates the number of items in the pallet. If you see more than three of the same items, they are likely pull-outs from the retailer and not customer returns.

This detail is very helpful for resellers because pull-outs are often in mint condition and can be sold at the original retail price or very close to it. In general, these pallets are well worth bidding high amounts as they will generate healthy profits.

Sell Price

This indicates the item’s original price. Some manifests may not have this information, so you will have to do your own research to determine its average selling price on online platforms and how much consumers are willing to pay for it.

Salvage Percent

This is the percentage that liquidation buyers will buy the item. It is based on the original retail or wholesale price of the product as well as the condition of the item.

For example, if the salvage percent is at 50%, and the product originally retails at $100, then the final price for the buyer will be $50.

Approximate Cost

This is the approximate cost of each item in the pallet, often based on the original retail or wholesale price.

Extended Approximate Cost

This is the total cost of all the items in the pallet. The approximate cost of each unit is multiplied by the quantity, and all amounts are added up for the price of the entire pallet.

Reading a Liquidation Manifest

Let’s take a look at a sample manifest from an eCommerce store. Liquidation marketplaces often advertise the pallets that are available for bidding and include downloadable manifests in all listings.

A manifest might indicate the following:

  • Pallet retail value: $5,000
  • Liquidation buyer cost: $3,500 (75% of the original retail price)
  • Category of merchandise: Customer Returns
  • Number of pallets with number of pieces: 1 pallet with 100 items

The customer returns manifest—often an Excel sheet—will have a list of all 100 items in the pallet, indicating the product description, quantity, and the unit cost per item.

For example, when you look at an Amazon customer return manifest, you may find a list of big-x brands that will attract you to purchase the pallet. Do your due diligence and check each Amazon Standard Identification Number (ASIN) listed to look at the product details, current pricing, and market demand.

These details will help you determine if you can market and sell these items at markups that will lead to healthy profits for your business. If you can get a good return on your investment, then place your bid.

Liquidation manifests also include the following descriptions:

  • Brand New - Items are retail ready, factory sealed in their original packaging, with no defects or dents.
  • Refurbished
    • Grade A - Items have been restored to manufacturer standards and repackaged in retail-ready boxes.
    • Grade B - Items are fully functioning and retail ready, with minor blemishes or slight wear.
    • Grade C - Items have been restored to the manufacturer’s specifications, but they have significant defects, dents, or scratches.
    • Grade D - Items have very significant cosmetic defects.
  • Untested Customer Returns - Items have not been tested nor repaired.
  • Tested Not Working - Items have failed functionality tests and may lack essential components. Salvaging parts may create working units.
  • Damaged/Missing Parts - Retail returns have missing components and are sold as-is.
  • Scrap - Items have gone through parts harvesting but may still be used to create working units.

Be Aware of What You’re Buying

Liquidation marketplaces are excellent sources of inventory that you can sell at a profit. But before you place your bid, you must first check the liquidation manifest and do your due diligence.

Knowing the terms and codes used in these documents will help you determine if a pallet is a worthy investment. Do your own research and calculations so you can set yourself up for success as a reseller.

 

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