Wholesale irregular merchandise is a closeout category that consists of products that were produced with a defect due to the manufacturing process. For example, a mill that produces jeans might have set the sowing machine on a slower interval speed, and now the pockets on the jeans are larger than originally designed. Or, one of the letters was not fully embroidered and the logo is not spelled correctly. Because the designer ordered the clothing to be made to certain specifications, he will not want the jeans with their current defects. This situation is very common when clothing is produced overseas, either because of the language barrier, or due to miscommunication. The factory has no choice but to either dispose of the clothing, or to sell it at below its cost to a wholesaler that deals with irregular clothes. Irregular merchandise can also be created as a consequence of the substitution of inferior materials. For example, the manufacturer in the above situation orders denim from another source because of a lower price offer. Once the jeans are washed the workers notice that the denim is allot thinner than expected, and the pants do not pass a quality inspection. In this situation, the pants will have to be unloaded into the irregular apparel market.
There are entire clothing businesses based on buying and selling what is called seconds. The potential for seconds is large because many consumers do not mind if the design is slightly askew, or if the logo is misspelled, and at the same time, the production of defective merchandise is a normal consequence of the production cycle. Also, companies such as Apple, Starbucks, and Google will order novelty items, hats, and shirts for corporate promotions, they will refuse goods if they are not in perfect condition. The screen printer who now has to take these items back will sell them to dollar and discount stores to recoup some of his production costs.
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