Condition grading scales and how to compare them
There is no industry standard for condition grades on closeouts and returns. A/B/C/D letters, like new/good/fair, retailer program grades, electronics refurbishment grades and apparel tags like NWT each mean what the seller defines. Get the definitions in writing and map them to your own grades so you can compare sellers.
Reviewed by Tyler Kober · Updated
Key takeaways
- No grade carries a universal meaning. "Grade A" from one seller can be another seller's "B".
- Ask for the seller's grade definitions in writing before you buy, and keep them in the purchase file.
- A useful definition says what was checked (function, completeness, cosmetics, packaging) and how.
- Map every seller's scale to your own internal grades so offers are comparable.
- Update your map from what you actually receive, not from what the label says.
Are condition grading scales standardized?
No. There is no industry-wide standard for grading closeouts, shelf pulls or returns. Letter grades, "like new / good / fair", retailer program grades, electronics refurbishment grades and apparel tags each mean what the seller says they mean. The only reliable grade is one with a written definition you have in hand, mapped to your own scale.
That is not a reason to distrust grades. It is a reason to read them as one seller's shorthand. The manifests and condition guide covers condition in the wider context of the manifest; this page is about the grades themselves.
The scales you will meet
| Scale | Where you see it | What it usually tries to say | What it often leaves out |
|---|---|---|---|
| A / B / C / D | General merchandise returns, mixed loads | A best, D worst or salvage | Whether units were tested; packaging state |
| Grade A / Grade B only | Returns sorted into two streams | Sellable vs needs work | How "sellable" was decided |
| Like new / good / fair / poor | Online-oriented resellers | Cosmetic condition | Completeness and function |
| Retailer or program grades | Large retailers and returns processors | Their own inspection outcome | Their criteria are often not shared |
| Refurbishment grades | Phones, laptops, tablets, small appliances | Cosmetic condition after a functional test | Battery health, parts origin, warranty terms |
| NWT / NWOT | Apparel and footwear | Tags attached or not | Whether it was tried on, size run, season |
| New / used / for parts | Marketplace-style listings | Broad state | Anything in between |
The terms underneath the grades, such as shelf pull, customer return and salvage, are explained in condition terms explained.
Why grades are not standardized
Every seller grades for its own reasons. A retailer grades returns to decide which go back on the shelf and which get sold off. A refurbisher grades to price its own stock. A liquidator grades to split a load into lots. Each uses different staff, different time per unit and different tests. A ten-second visual check and a full function test can both produce a "grade A". Neither is wrong; they just answer different questions.
Grades also drift. A seller with a backlog grades faster. A new team grades differently from the old one. A seller who has had complaints may tighten up.
How to get written definitions
Ask for them before you make an offer, in writing, and keep them with the deal. A useful definition answers five questions:
- Function: was each unit tested, and what did the test cover?
- Completeness: are accessories, manuals, cables and parts checked?
- Cosmetics: what marks, scratches or wear are allowed in this grade?
- Packaging: original, retaped, replacement or none?
- Exceptions: what share of units in the grade may fall below it, if the seller states one?
If the seller cannot answer, that is information too. Price the load as if the grade were one step lower, or as untested.
How to map a seller's scale to your own
Build one internal scale based on where you can sell each unit. Then translate every seller's grades into it before you price.
- Define your own grades by channel. For example: grade 1, sells online as new or like new; grade 2, sells in your store or online as open box; grade 3, bin or discount table; grade 4, parts, repair or disposal.
- Write your criteria for each. Same five questions as above: function, completeness, cosmetics, packaging, exceptions.
- Translate the seller's definitions. Their grade A may be your grade 1 or 2 depending on whether they test.
- Price on your grades, not theirs.
- Record what arrives. Sort the received units into your grades and compare with the translation.
- Adjust the map for that seller. Over time this becomes your most useful buying tool.
Worked example: mapping a seller's grade B
Illustration only. The grade counts are letters, because the real split comes from your own receiving records, not from a typical figure.
A seller offers a pallet of 50 small kitchen appliances, all "grade B". Their written definition says: "Customer return, powered on, may have cosmetic marks, packaging may be damaged or missing." Not mentioned: completeness, or a full function test.
Your translation: powered on but not fully tested and not checked for parts, so you expect a spread across your grades 2, 3 and 4.
On receipt, you sort the 50 units and record the count in each of your grades:
| Your grade | Units | Share of the pallet |
|---|---|---|
| Grade 1 (sells as like new) | n1 | n1 ÷ 50 |
| Grade 2 (open box) | n2 | n2 ÷ 50 |
| Grade 3 (bin or discount) | n3 | n3 ÷ 50 |
| Grade 4 (parts or disposal) | n4 | n4 ÷ 50 |
| Total | n1 + n2 + n3 + n4 = 50 | 1 |
Those four shares are this seller's "grade B", translated. If your count shows most units in grade 2 with a real tail in grades 3 and 4, next time this seller offers "grade B" you price it that way: the value of each of your grades on its own channel, times its share, added up. Keep the shares from every load; after three or four, you know whether the seller's grade B is stable or drifting. Another seller's "grade B" will need its own map. If what arrives falls well outside the written definition, that is a condition variance; manifest accuracy and variance covers how to document it.
How grades should change your offer
A grade is only useful if it changes what you pay. Once you have mapped a seller's grade to your own, price each of your grades on its own channel and add them up. Do not take one "average" price and apply it to the whole load.
Three practical rules help:
- Price the tail, not just the head. The share of units that ends up in your lowest grades decides whether the load makes money. A load that is half your best grade and half salvage is not the same as a load that is entirely your middle grade, even if the averages match.
- Discount for missing information. An untested grade costs you testing labor and some failures. A grade with no completeness check costs you missing parts. Price both, in your own labor and loss figures, before you offer.
- Pay more for tight grading. A seller whose grades match your receipts load after load saves you sorting time and surprises. That consistency is worth something in your offer, and saying so encourages the seller to keep grading carefully.
The same logic works in reverse for sellers. A clear, written grade definition with a functional test behind it lets a buyer price more of the load with confidence, which tends to mean fewer deductions for doubt.
Questions to ask about any graded load
- Who graded it: the retailer, a returns processor, or the seller?
- When was it graded, and has anything been pulled from the grade since?
- Was every unit graded, or a sample?
- Are grades recorded per unit, per line or per pallet?
- Can you see photos of a typical unit and the worst unit in each grade?
Category notes
Electronics. Ask whether grades include a battery check, data wipe, and serial number or IMEI checks for blocked devices. A cosmetic grade on its own says nothing about these. Loads of this kind are described on wholesale closeout electronics.
Apparel. NWT versus NWOT matters more online than in a store. Also ask about size runs and whether items were tried on. See wholesale closeout apparel.
Home and small appliances. Completeness is the usual problem: lids, blades, cords and attachments. A "grade A" with a missing part is not grade A for your customer.
Mistakes to avoid
- Comparing two sellers' grades directly. Compare their definitions, mapped to your scale.
- Accepting a grade with no definition. Price it as untested.
- Treating cosmetic grades as functional grades. "Like new" may describe the outside only.
- Never revisiting the map. Your records from received loads are better than any label.
- Listing a seller's grade on a marketplace. Use the marketplace's own condition terms and describe what you checked.
Buying graded loads on Skyline Dealz Marketplace
Where a load on Skyline Dealz Marketplace is graded, the listing states what the grade means for that load. Approved member buyers receive alerts on loads that match what they buy and can make an offer; to start, request access. For the basic vocabulary underneath the grades, see the glossary entry for customer return.
Frequently asked questions
What does grade A mean for liquidation returns?
It usually means the best grade the seller offers: like new, often complete and working, sometimes in opened packaging. But there is no standard, and some sellers use grade A for untested returns that simply look clean. Ask that seller what grade A requires, whether units were tested, and what share of a grade A load they expect to be fully sellable.
What do NWT and NWOT mean in apparel closeouts?
NWT means new with tags: the original retail tags are still attached. NWOT means new without tags: described as unworn, but the tags are missing. NWOT items usually sell for less and may raise questions on marketplaces about authenticity or prior wear. Neither term says anything about fit, size run or season.
Are refurbished electronics grades the same everywhere?
No. Refurbishers and resale programs set their own grades, usually describing cosmetic condition after a functional test. Two sellers' "grade B" phones can differ in battery health, screen marks and accessories. Ask for the written standard, what the functional test covers, and whether a warranty comes with the grade.
How do I compare grades from two different sellers?
Build your own internal scale based on what you can sell and through which channel. Translate each seller's written definitions into your scale before you price, then check the translation against what actually arrives. After a few loads you will know which sellers grade tightly and which grade loosely.
Related
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