Overstock / Overrun Merchandise
Overruns are over production from specific cuttings or orders and are generally the result of the order not matching the amount of material needed. The amount of widgets needed to produce 100 widgets may actually be enough to produce 150 widgets and therefore we have a 50 widgets overrun. Overruns by definition should all be first quality, brand new merchandise that has either been produced in excess by a manufacturer or over-ordered by a retailer. True overstock or overrun merchandise is becoming a rarer commodity than in the past due to better inventory control software and better handling practices. Typically this product will have little to no damage.

Shelf-pulls
Merchandise that has been placed for sale in a retail environment, but not sold for a variety of reasons. Often large retailers target a particular product for a certain season...once the season is over the merchandise must be cleared out to make room for next season's/year's product. Floor space is like gold in the retail business, and few stores can afford to have merchandise stocked on the shelf when the "next big thing" has just been released and ready for sale. Some manufacturers will actually buyout a competitors product (and designate it for liquidation) just to gain the shelf space for their items. Many stores sell at premium prices and do not wish to cheapen their brand or identity by continually clearance selling items...rather than place the items in a bargain bin; they will sell them in large quantity for pennies on the wholesale dollar. Other stores may have made miscalculations (such as trying to sell too many bathing suits in New Hampshire in February...product like this is a hindrance to one retailer, but could be a gold mine for a Florida or California store desperately wanting this merchandise). Whatever the reason that the item did not sell, it is classified as a "shelf-pull" and such items should have little to no damage.

Discontinued
When manufacturers come out with new models, old models become out-of-date and no longer desirable to sell. Discontinued merchandise can still be very valuable and useful (and in the collectibles industry highly desirable!), however is often sold to liquidators and surplus dealers at pennies on the dollar.

Open Box/Floor Models
This also includes items with box damage. Often items need to be removed from their box to be used as displays at a retail store (vacuums, small appliances, toys, just about anything). The items can range from brand new, to slightly used (due to use in demonstrations), but is almost always in good, useable condition. Sometimes the store will decide to sell these at a discounted rate in the retail environment, but often they are marked for liquidation.

Customer Returns
Customer returns include an extensive range of merchandise including products actually purchased and then returned by customers, in store damages, marked out of stock products and case packs that have been opened. Most of these products are sold by the truckload from various points around the country. The products are either sold as a percentage of the cost of retail or by the pallet. The store returns are less than perfect merchandise. Customers return items for a number of reasons, including: wrong color, wrong size, received as a gift and don't need, saw the item cheaper at another store after purchasing, used it and didn't like it, can't figure out how to use it (common with electronic items), slightly flawed somehow (scratched, nicked, dinged, etc.), missing parts, partially or fully defective. Have you ever returned an item to the store for one of these reasons? If so, then it is likely your item ended up on a salvage pallet to be sold to the secondhand market. Many stores will take brand new items that haven't been opened and send them to salvage because they have been taken home or partially opened and thus the item is not resalable in the store. Purchasing customer return pallets and merchandise often offers the best value, as it is sold for pennies on the dollar and can be a source of high-demand merchandise with outstanding resell potential. If you buy customer returned merchandise, you typically will want to inspect and test each piece. While brand new merchandise in perfect condition is what everyone hopes to find in these pallets, don't overlook the slightly flawed or non-functional merchandise. These items are often in demand and can fetch good prices. The percentage of good, sellable items in a customer return load varies by store and is never guaranteed (since they can be returned for a variety of reasons), however the pricing usually makes them a good bet.

Salvage
Salvage merchandise is sometimes a broad term used as a synonym for surplus or liquidation items. Whenever you are purchasing items categorized as "salvage", always ask about the source of the merchandise. Often merchandise that has been picked through for the sellable items, leaving only parts and unrepairable merchandise. Always ask your seller to make sure whether you are getting the former or the latter version of "salvage"!

Surplus
Any inventory, merchandise, or equipment that can no longer be sold at the regular retail or wholesale price, but still possesses value. Surplus is generally caused by discontinuations, overruns, closeouts or overstock. Most businesses have a need to liquidate 2-5% of their products as surplus.