Every business has a good time and a bad time. During bad times, the business might not be able to retain its existence and has to close; it will then convert whatever the assets it has into cash to pay off debts. This process of converting assets into cash is called "Liquidation." In case of clothing stores, when the business has less sales and profits start declining over time, the business might not hold up, especially when the economic climate is not in favor of creditors. The clothing industry does face such problems during the recession, when the customers spend very less. Then clothing liquidation takes place. Clothing liquidation might also be the sales of surplus merchandise or closeout.

Liquidation requires the business to convert the existing stock of apparel to cash mainly through sales. The sales might be done directly to the public or to companies that handle the liquidation. These companies buy clothes and accessories and sell them to retailers. There are many clothing liquidation companies around selling both in online as well as in physical stores. They buy from retailers, departmental stores, wholesalers and manufacturers. Many companies even provide the actual retail price that the merchandise would have been sold at. All the clothes that are sold here are brand new and are of the existing fashion or of previous seasons. The clothes will vary in pricing based on factors like style, material, designs, and the actual retail price. Most of the liquidation companies buy brand apparel, to ensure good pricing and sales in terms of numbers.

Liquidating company provides bargains and good discounts, when bought in wholesale. They sell clothes at prices lower than the manufacturer's wholesale price. The liquidation companies create a whole new world in the field of wholesale marketing. They have enormous buying power. This creates the possibility of reducing prices to the consumers and in turn increases the consumer's buying capacity. Thus, clothing liquidation industry plays a very critical role in the apparel industry.

The liquidation companies have elaborate and exhaustive online websites giving information on all the wholesale products available for sale. Clothing and accessories are an important category in these sites. They provide services like customer returns and bargains, which ensure that more the number of items bought, more the discounts. These sites provide the option of different packages like case packs, Pallets, and truckload. This is an ideal arrangement for retailers to buy, as they buy in large quantities at lower prices and in turn sell them to the customer with a margin.

Therefore, clothing liquidation companies are the best places for buying good quality clothes at affordable rates. The retailers and the common man can take advantage of the clothing liquidation sales. It provides a chance to buy brand new branded clothes at cheap rates, which are not even opened from their original packaging. Clothing liquidation plays a vital role for balancing the wholesale industry, by managing the cycle of buying and selling. The customers also get a good deal by buying from the clothing liquidation companies.