Salvage sits at the bottom of most condition lists, so buyers tend to treat it as worthless or as the cheapest way in. Both mistakes come from pricing the word instead of the definition, and instead of the operation that has to deal with it.
- Salvage generally means the most condition and function risk a program sells.
- Programs define it differently. Read the definition.
- It isn't trash. It isn't easy profit.
- Its value depends on repair skill, parts access and a channel for parts or as-is goods.
How programs define salvage
Here is how three real sources word it. Read them as three separate definitions, not one shared one.
- Registix Appliance Conditioning Guide, described as for parts or scrap recovery: heavily damaged, non-functional, and items may have missing major parts.
- CLT Wholesale Inventory Grade Guide, used for tools, outdoor power equipment and mowers, grade E (Salvage), parts only: does not work, used for parts.
- B-Stock's condition list for its Lowe's liquidation marketplace describes salvage as needing significant repair before resale, or else being used only for parts or components (see Sources).
The wording differs, and so can the inventory. Two say the item doesn't work. One allows for significant repair before resale. Only one mentions missing major parts. For the program you're buying from, its written definition is the only one that counts.
What salvage is not
Salvage is not trash. Some salvage units can be repaired. Others carry parts that working units need. Some sell as they are to buyers who repair them.
Salvage is not easy profit either. A low purchase price can be more than used up by freight, labor, repair, parts, storage and disposal. On bulky goods, those costs arrive whether or not a unit ever sells.
Who salvage can work for
- Repair shops and refurbishers with the skills, tools and parts access to bring units back.
- Parts sellers who can dismantle, catalog and sell components.
- Operators with a channel for as-is goods and customers who understand what they're buying.
- Businesses already processing other grades that can fold salvage into existing repair and parts work.
It tends to go badly for a business with no repair bench, no parts channel, little storage and no plan for what doesn't sell. If that's you, salvage is not a cheap way in. It's an expensive way to learn.
Questions to ask about salvage
- How does this program define salvage, in writing?
- Is salvage mixed into other grades on this load, or sold separately?
- Are major parts missing, and is that disclosed per unit?
- What claims or variance terms apply to salvage, if any?
- What will it cost me to dispose of what I can't use?
See also: How liquidation inventory condition and grading actually work and Why some buyers make money on liquidation and others don't.
There is no typical recovery on salvage. It depends on the category, the program's definition, your repair rate, demand for the parts and your disposal costs. Build it from your own records: units bought, units repaired and sold, parts sold, units scrapped and every cost in between, then compare with landed costLanded cost Landed cost is what a unit really costs you once it is in your building and ready to sell, purchase price plus freight, handling, parts and the cost of what could not be sold..
- Treating salvage as trash and passing on inventory a repair-capable business could use.
- Treating salvage as easy profit because the price is low.
- Assuming two programs' salvage grades describe the same inventory.
- Forgetting disposal costs for what you can't repair or sell.
- Buying salvage without a repair bench, a parts channel or a buyer for as-is goods.
- Selling a salvage unit under a better grade.
Terms in this guide
Sources
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