Irregular Wholesale Merchandise: A Definition of This Liquidation Category
Wholesale irregular merchandise is a closeout category consisting of products that were produced with a defect due to the manufacturing process. For example, a factory that produces jeans might have set the seeding machine to a slower speed range, and now the pockets on the jeans are larger than originally designed. Or, one of the letters was not completely embroidered and the logo is not spelled correctly. Because the designer ordered the clothing to be made to certain specifications, he won’t want the jeans with their current flaws. This situation is very common when clothing is produced abroad, either due to a language barrier or a lack of communication. The factory has no choice but to dispose of the clothing or sell it below cost to a wholesaler who deals in irregular clothing. Irregular merchandise can also be created as a result of substituting inferior materials. For example, the manufacturer in the above situation orders denim from another source due to a lower price offer. Once the jeans are washed, the workers notice that the denim is much thinner than expected and the pants fail quality inspection. In this situation, the pants will have to be unloaded on the irregular clothing market.
There are entire clothing businesses based on buying and selling what are called seconds. The potential for seconds is great because many consumers don’t care if the design is slightly skewed or the logo is misspelled, and at the same time, the production of defective merchandise is a normal consequence of the production cycle. Also, companies like Apple, Starbucks and Google will order novelty items, caps and t-shirts for corporate promotions, they will reject the products if they are not in perfect condition. The screen printer who now has to recoup these items will sell them to discount and dollar stores to recoup part of their production costs.