Unsellable Stock: Disposal, Liquidation and Donation Instructions for a 3PL

I keep a one-page disposition sheet for every SKU that stops selling at my 3PL. It sounds fussy, but it keeps damaged, expired, or discontinued units from sitting in limbo and running up storage. The sheet starts with who can approve what. I name one person for donation, one for liquidation, and one for disposal. The 3PL gets those names in writing, along with a backup. If approval arrives by email, I ask them to reply-all so the record is clean.

Then I ask for the fee schedule before anything moves. Charges vary: per-unit pick fees, per-pallet handling, certificate fees, and storage while we wait. I ask what triggers each one. For example, say a donation pick fee is $35 and a disposal certificate costs $15; I want those lines on the invoice, not a surprise lump sum. I also confirm whether the 3PL charges for photos or condition notes. Check the provider’s current terms, since these numbers change.

Donation records need more care than people expect. I ask for an itemized list by SKU, quantity, and condition, plus the receiving organization’s name and date. If the charity provides a receipt, I keep it with the batch photos. I do not guess at value. I record what we donated and let our accountant handle valuation.

For liquidation, I work in batches. I set a minimum batch size, a floor price, and a deadline. I ask the 3PL to send a manifest before the batch goes out, and I approve it in writing. Recovery is not guaranteed, so I treat any proceeds as upside. When I need a new partner for this kind of work, I use find a fulfillment partner to compare providers before I commit.

Disposal is the last resort. I request a certificate of destruction with the date, method, and quantity, and I keep it with the approval email. Once a quarter, I review the whole sheet and update names, fees, and batch rules. That review takes twenty minutes and saves me a lot of guessing later.

— Mike Carter