Wholesale Salvage Merchandise: A Definition

Wholesale salvage merchandise is a category of product used in the wholesale and liquidation business to refer to merchandise that has been damaged or has been exposed to a situation where the potential for damage is high. . Salvage is a term that was first used to refer to products that were transported on derailed trains. For example, if a train was carrying a container of electronics and it derailed, the insurance company would pay the cargo owner 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 may have deteriorated due to an accident, fire, or flood. Although the salvage buyer can purchase this type of inventory for literally pennies off the original wholesale cost, he must sort the products and attempt to repair any damaged merchandise.

The salvage category is appropriate for a retailer who has access to consumers who can tolerate lightly damaged merchandise for the savings involved. A salvage dealer should consider purchasing items where the chance of damage is less. For example, a television has a much higher chance of being damaged if a truck carrying it crashes than a pair of jeans. And because it’s so much easier to sew clothing than it is to repair general merchandise, more experienced salvage shoppers will prefer to focus on apparel and soft goods. Due to the nature of this wholesale category, it is imperative that buyers inspect the products in person, so they can determine what percentage of the inventory can be sold as-is and the cost involved in repairing damaged items. If an inspection is not possible, the buyer will want to get a price low enough to mitigate their risk of making an unseen purchase.