Pallets of assorted branded goods sell openly by the box, often for a small share of retail value. Their contents come from a small number of predictable places.
Returns that cannot go back on sale
A returned item costs money to inspect, repackage and restock. For lower-value goods that handling cost can approach the price the item would fetch second time round.
Retailers therefore batch returns rather than assess them individually. The batch goes to a liquidator by weight or by pallet, priced against what the buyer might recover.
Nothing in that process guarantees the goods are faulty. A large share of returns are unwanted gifts, wrong sizes and changed minds, mixed in with genuine failures.
Overstock and cancelled orders
The second source is stock that never sold. Seasonal ranges, discontinued colours and goods left when a chain closes stores all need somewhere to go quickly.
Cancelled wholesale orders add to it. A factory run built for a retailer that pulled out has to be sold somewhere, and liquidation absorbs it at low prices.
This stock is generally in better condition than returns because it has never left the supply chain, and it is priced accordingly when sold by the pallet.
What the grading words mean
Pallets are described by grade, and the words are conventions rather than standards. They shift between liquidators and are not defined by any outside body.
Broadly, higher grades indicate unopened or lightly handled goods, and lower grades indicate customer-damaged or untested items. Salvage and mixed lots sit at the bottom.
Because nobody polices the labels, the grade is a claim by the seller. The manifest listing what is inside carries more weight than the grade attached to it.
Why the price looks so low
The buyer is taking on work the retailer declined to do. Sorting, testing, photographing and listing hundreds of mixed items absorbs hours before anything is sold.
They also take the loss on whatever cannot be sold. A pallet is priced on the assumption that a meaningful portion of it is worth nothing at all.
What looks like an enormous discount is really a payment for labour and risk that has moved from the retailer to whoever bought the pallet.
How the goods reach ordinary shoppers
Sorted liquidation stock reappears in discount chains, market stalls, bin stores and marketplace listings, often without any mention of where it came from.
This is why an unopened branded item can turn up in a shop that has no relationship with the brand, at a price the brand's own stores never offer.
It also explains inconsistent condition on identical listings. Two sellers may hold the same product from the same pallet run and have graded it entirely differently.