Hypothetical example: SKU sell-through and markdown plan for a $24,000 discontinued lot (2,000 units at $12.00)
| SKU | Units | Sell-through plan | Revenue |
|---|---|---|---|
| A | 800 | 500 at $24, then 300 at $18 after week 3 | $17,400 |
| B | 700 | 400 at $22, 200 at $16, 100 sold as bundle at $10 | $13,000 |
| C | 500 | 200 at $20, 150 at $14, 150 sent to a bulk reseller at $6 | $7,000 |
| Total | 2,000 | All units placed in the plan | $37,400 |
| Lot cost | 2,000 units at $12.00 | $24,000 | |
| Fees and shipping | 12% of $37,400 | $4,488 | |
| Hypothetical funding cost | $26,400 total repayment minus $24,000 received | $2,400 | |
| Hypothetical net result | $37,400 minus $24,000, $4,488 and $2,400 | $6,512 |
All figures are hypothetical. Replace the prices, sell-through and funding cost with your own estimates and the numbers in your written offer.
What demand evidence should I have before I fund a discontinued line?
You need proof that buyers want this product at the price you plan to charge, such as your own past sales, repeat orders, waitlist requests or current sold listings for the same item.
A product being discontinued does not make it valuable. Sometimes the manufacturer is dropping it because demand faded. Look at how the same SKUs sold for you before, and at what prices similar units are selling for today.
Write down three numbers for each SKU: units you can realistically sell at full price, units you can sell at a markdown, and units you would only move in bulk. In the example above, SKU A has strong demand (500 units at $24), while SKU C is mostly a bulk-exit item, and the plan says so honestly.
If you have no sales history for the product, say that on the application. A funder looks at the whole picture, and a smaller first purchase can be a better test than the full lot.
How do warranty and obsolescence issues change the math?
They change how many units you can sell and how long you can hold them, so price in the risk before you accept the lot.
Ask the seller four questions in writing: Is the manufacturer warranty still honored on discontinued units? Is parts or software support ending? Are the units new, open-box or refurbished? Do they carry date codes or expiry dates?
- Electronics and appliances can become harder to sell once software or parts support ends.
- Fashion and seasonal goods lose value as the next collection arrives.
- Food, cosmetics and supplements carry expiry dates that shorten your window.
- Anything with a recall history needs extra checking before you buy.
If your own return or warranty costs rise on a discontinued item, include that in the fees line of your plan. Ask your attorney or accountant about any warranty obligations you take on when you resell.
How do price and deadline decide whether the deal works?
Compare the unit price to your realistic average selling price after markdowns, not to the original list price, and check that the closeout deadline leaves enough time to pay and receive the goods.
In the example, the lot costs $12.00 a unit and the plan averages $18.70 a unit across all 2,000 units ($37,400 divided by 2,000). That is a healthy spread before costs, but fees, shipping and funding cost take $6,888 of it, so the net result is $6,512.
Now test the deadline. If the seller needs payment in a few days, a bank loan may not be fast enough. Short-term working capital for inventory deals is one product funders review for this kind of purchase. Funders typically give a decision within 24 hours of a complete application, but funding time varies by product, so ask the seller whether the deadline allows for it.
For the wider process, see our guide to closeout inventory financing.
What is the exit plan for stock that does not sell?
Decide before you buy where the last 10 to 20 percent of units will go, and put a dollar figure on it, even if that figure is low.
Every closeout leaves a tail. Your options usually include bundling slow units with fast ones, selling the remainder to a bulk reseller, donating where your accountant confirms it is appropriate, or holding a small amount for later demand.
In the example, 250 of the 2,000 units go to a bundle or a bulk buyer at $6 to $10. Those units earn little, but they turn into cash by a known date. If the plan only works when every unit sells at full markdown price, the deal is too tight.
A rule of thumb for yourself: if the total still works when the bulk-exit price is cut in half, the downside is limited. When you are ready, apply here with the lot details and your plan; checking options does not affect your personal credit score.
When should I skip a discontinued closeout?
Skip it when the only reason to buy is that the discount is large, when the units cannot be tested or returned, or when repayment would depend on selling nearly every unit.
Prime would rather you pass on a weak deal than fund it. Other signs of a weak deal: the seller will not put terms in writing, you cannot name a sales channel, or the lot is far larger than anything you have sold before. For a deal that fits, the closeout inventory funding page explains what to prepare.
Frequently asked questions
Can I get funding for discontinued inventory?
Funders review purchases of discontinued or closeout inventory case by case. They look at the business, the lot, the price and how you plan to sell it. Having a written SKU plan and the seller quote makes the file easier to review.
What documents help for a closeout purchase?
Commonly requested items include recent business bank statements, government-issued ID, a voided business check, and the deal paperwork such as the seller quote, the unit list and the deadline. Larger requests may add tax returns or financial statements.
Does the lot have to be new?
Not necessarily, but the condition affects how funders and you value it. State clearly whether units are new, open-box or refurbished, because condition changes your selling price and your return costs.
What if only part of the lot is worth buying?
Ask the seller whether you can buy fewer SKUs or a partial lot. Funding a smaller purchase you can sell through is often safer than funding the whole lot just to receive the biggest discount.
Do I have to accept an offer?
No. There is no obligation to accept an offer, and checking your options does not affect your personal credit score. Compare any offer against your own plan before you decide.
Describe your purchase and deadline
Tell us about the lot, the price and the closing date, and we will help you get it in front of funders.
Updated October 17, 2026 · Prime Funding Now Funding Team