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Closeout companies and Salvaging
In this article I wish to go about clearing up a misconception about closeout companies. Some people assume that a closeout company only deals with liquidating assets and bankruptcies. Nothing can be further from the truth.
One of the reasons for this misconception lies in the name which implies that closeout companies only deal with “closeouts” in the narrow meaning of the term. The other major reason for the confusion is that bankruptcy is the one situation in which you must turn to closeout companies, so people have somehow linked the two. However, the bulk of business for closeout companies is dealing with regular overstock and salvaged goods for some of the best known and popular corporations and department stores.
If you’re not aware of the “lingo”, a “salvaged good” often refers to returned or display merchandise that a store or business can’t simply just put back on the shelves because there is some risk of it having been damaged. Sometimes the term is used to denote stock that is (or might have been) damaged due to circumstances such as a flood or a transportation accident. Salvaged goods are by definition void of any warranty.
While it is theoretically possible for you to try to get rid of salvaged goods on your own by for example holding private garage sales or going on eBay – it’s not very practical and it’s almost an entire business model of its own. It’s generally not practical to develop an entire secondary business just to handle the side-issue of your primary business.
Even the biggest corporations and department stores simply let a closeout company handle their salvaged goods. This is because successful businesses got where they are by knowing how to outsource and be more productive. They focus on what they do best, and then let other companies do the rest.
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