Hypothetical example: three recovery scenarios on $40,000 of manifest retail value
| Scenario | Recovery | Sale proceeds | Total cost | Result |
|---|---|---|---|---|
| Strong | 35% of $40,000 | $14,000 | $9,700 | +$4,300 |
| Base | 25% of $40,000 | $10,000 | $9,700 | +$300 |
| Low | 15% of $40,000 | $6,000 | $9,700 | -$3,700 |
Total cost: purchase $8,000 + freight $900 + funding cost $800 = $9,700. Funded amount: $8,900. Repayment: 4 monthly payments of $2,425 = $9,700. Break-even recovery: $9,700 / $40,000 = 24.25%.
All figures are hypothetical, and they exclude labor, listing time and selling fees. Replace the funding cost with the total repayment in your written offer minus the cash received.
Manifested or estimated contents: what am I really buying?
A manifest lists items and retail values but does not promise their condition, so treat the manifest total as a ceiling and your own estimate as the working number.
A manifested pallet shows item names, quantities and often original retail prices. An estimated or unmanifested pallet gives you a category and a guess. The more detail you have, the better your recovery estimate, and the easier it is to show a funder what you are buying. Our overview of discount and liquidation resellers covers how funders think about this kind of inventory.
Ask the seller how the manifest was built, whether items were scanned or typed, and whether prior buyers reported the same condition mix. Save the manifest and the seller's terms for your application.
How do condition grades change what I can sell?
Condition grades sort returns from like-new to salvage, and each grade sells at a different share of retail through different channels.
Grade names vary by seller, so ask for the definitions in writing. A typical ladder runs:
- Like new or open box: complete and working, may sell through marketplaces or your own store.
- Used, good: works, shows wear, needs testing and cleaning.
- Damaged or missing parts: sold as-is or for parts.
- Salvage: little or no resale value.
Estimate the share of units in each grade, then assign a realistic share of retail to each. That is how you arrive at a recovery rate rather than picking one at random. Your sale channels matter too, since selling lots as-is to another reseller recovers less per unit than selling individually, but takes less time.
How much should I allow for unsellable stock?
Assume some units will never sell, and subtract them before you judge the deal: the unsellable allowance is already inside your recovery rate, so do not count it twice.
If you expect 20% of the manifest value to be unsellable, then at most 80% of $40,000, or $32,000, is even a candidate for sale. Recovery of 25% means you expect to collect $10,000 of that. That is the base scenario in the worksheet.
Track units by outcome after the first pallet: sold, refurbished, parted out, discarded. After two or three purchases you will have your own recovery history and can replace the guesses here with it. Until then, keep your plan on the low side.
What happens to funding cost under low recovery?
Funding cost is fixed by the offer, so low recovery does not change what you owe; it only shrinks what you collect, which is why the low case is the one to test.
In the worksheet you owe $9,700 in all: $8,000 purchase, $900 freight and $800 funding cost. At 35% recovery you collect $14,000 and keep $4,300. At 25% you collect $10,000 and keep $300. At 15% you collect $6,000 and fall $3,700 short, which you would pay from other cash. The break-even point is 24.25%, so any recovery below it loses money before labor and fees.
If the low case is unaffordable, reduce the purchase, ask for a longer schedule, or pass on the lot. Our closeout inventory financing guide covers when not to fund a deal, and the same discipline applies here.
When your numbers hold up, describe your purchase and deadline on the application. A decision typically comes within 24 hours of a complete application, with no obligation to accept an offer.
Frequently asked questions
Can I fund return pallets without a manifest?
It may be possible, but a funder will likely want to know how you estimated contents and how you will sell them. Share the seller's description, photos and your sell-through history so the file is clear.
What recovery rate should I plan for?
There is no single right number. Build it from condition grades and your own channels, then test a low case. If the deal only works at the high end, it is a risky purchase.
Do funders care about condition grades?
They may ask how you plan to sell the goods and what the purchase is worth. Documented grades, the seller's terms and your past sales help the file, but each funder reviews its own criteria.
Is the funding cost included in the break-even?
It should be. Add purchase, freight and the funding cost (total repayment minus cash received) to get total cost, then divide by manifest retail value to find the recovery rate you need.
Which documents are commonly requested?
Recent business bank statements, government-issued ID, a voided business check and the seller's invoice or manifest. Larger or longer requests may add tax returns or financial statements.
Describe your purchase and deadline
Share the pallet price, manifest and deadline, and see what funders offer.
Updated October 17, 2026 · Prime Funding Now Funding Team