Manufacturers’ goal is to be able to supply all merchandise according to the demands of the consumers. They always make it a point to have all the resources in order to be able supply such merchandise and their goal normally is to have more supply of the merchandise compared to the demands of the customers to have a zero percent in demand while the overstock is just above zero percent as well to maximize the profit that they would get.

In reality, manufacturers makes predictions and forecast as to the level of demands but then no one cannot predict the future but would base on factual data from past records, statistical data on supply and demand, the economy of the country, the status of the market. Creating the closest amount of stocks to be supplied is done to reach the goal of having a maximum profit on the merchandise. There will always be overstocks, returns, surplus stocks, etc. that will come in the way, and in order to closeout these merchandise is to have the value go down and the customer would buy the merchandise in sets so that the manufacturer would not spend on the overstocks, returns, etc. for repair, while maximizing the profit. It will also be beneficial to the customer in the sense that they will be able to have possession of the merchandise at a very low cost while the value of it is still high in the market.

The customer has then the option to keep the merchandise or sell it at a price which is very cheap and still earn as well, so it is always a win-win situation. Closeout liquidation is always done when stocks are in abundance compared to the demands of the consumers. This is one strategy of manufacturers not to incur any losses due to over stocking and down falling of demands. The closeout liquidation then would be to have the merchandise equal out the debt, get rid of the merchandise and gain profit, to have the merchandise completely removed from the stocks and eventually replace it with new stocks or merchandise.