The off-price industry exists in a variety of forms. The differences among off-price businesses generally are based on how they operate, who owns them, how they acquire their merchandise, and the merchandise quality.
*Factory Outlets: Stores operated as outlets by manufacturers in order to sell factory overruns, surplus or flawed merchandise to the public at prices that are sometimes close to wholesale. An example is the Hanes Factory Outlet.
*Manufacturer's Outlets: Free-standing stores, often far from the factory, offering the manufacturer's merchandise at discounts. The bakery thrift stores operated by Pepperidge Farm and Wonder Bread are manufacturer's outlets.
*Captive Brand Stores: Outlets selling brands that are not traded anywhere except their own store, such as the Kuppenheimer Factory Store. Brand Name Discounters: These stores' merchandise is almost exclusively current season, first-quality with full selection. Examples are Marshall's, T.H. Mandy and Kids R Us.
*Off-Price Stores: Stores that buy very large quantities of merchandise directly from the manufacturers at below wholesale prices. Often these items are brand name. Some off-price stores may sell surplus stock, closeouts and overruns. Waccamaw Pottery is such a store.
*Liquidators: These merchandisers sell bankruptcy buy-outs, clearance and discontinued goods.
*First Quality: Without flaws.
*Irregulars: Slightly flawed merchandise with appearance and function usually unaffected. Generally these flaws are pulled threads, scratches, nicks.
*Seconds: Flaws are more serious than those of irregulars. Product may be misshaped, mismatched, stained, dented.
*Closeout: An incomplete assortment of goods being sold out of season or being discontinued because they are no longer fashionable.
*Overstocks, overruns or overcuts: Surplus goods after factories sell to regular retailers. Source: "The Complete Dictionary of Buying and Merchandising," National Retail Merchants Association; "The Outlet Shopper," by Carolyn Vogel Benson.