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Liquidation Candidates & Confidence

What puts a product on the liquidation list, how the recommended channel and confidence score are calculated, and why the number is a ranking, not a probability.

Last updated: September 22, 2026

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Liquidation is the last stop for inventory: the point where the question is no longer what discount clears this but what is the best way to get it off the shelf at all. Because the recommendation carries a confidence score and a short machine-written reason, it is easy to read as an unexplained verdict on your money. This article opens it up.

Estimated time: 5 minutes

What you'll accomplish

  • Know the six signals that can make a product a liquidation candidate
  • Understand how a channel is recommended and how the confidence number is produced
  • Know what the confidence score is not
  • Understand where approval thresholds take over

Requirements

  • Plan: Enterprise (liquidation suggestions).
  • Found at Actions → Liquidation.

What puts a product on the list

A nightly sweep evaluates unresolved inventory against six signals, but they don't all do the same job. Four of them can put a product on the list by themselves — any one is enough to make it a candidate:

Signal What it means
Aged beyond threshold The product has passed the age threshold — 180 days by default
Discount pass did not clear A discount was applied and the product still did not sell
Cannot discount without breaching margin floor Margin protection has nowhere left to go (see the margin article)
Season closed A seasonal product's window has elapsed

The other two never create candidacy on their own — they only take effect once a product is already a candidate through one of the four above, and only to help pick the best channel for it:

Signal What it means
Vendor accepts returns The vendor's terms make a return-to-vendor viable
High carrying cost at location Holding this stock at this location is expensive enough to act on

Two of the four gating signals have their own timing rules worth knowing: a failed discount pass is only counted once the discount has had a 30-day window to work, and the product must be at least 30 days older still before the failure counts against it. That delay is deliberate — judging a discount too early condemns products that were about to sell.

There are five disposition channels: Return to Vendor, Liquidate, Donate, Employee Sale and Scrap.

Every signal that fired contributes a weight to each channel, and the weights are summed per channel. The highest total wins. Some examples of how the weighting expresses real policy:

  • Vendor accepts returns puts +80 on Return to Vendor and nothing on anything else — if the vendor will take it back, that is almost always the best outcome.
  • Cannot discount without breaching margin floor pushes hardest toward Return to Vendor (+60), because a product you cannot discount profitably is a supplier problem before it is a clearance problem.
  • Season closed leans toward Donate (+45) and Liquidate (+35).

Category rules then apply surgical adjustments. Food weights Donate heavily (+70). Hazardous goods apply a −100 penalty to Donate, Liquidate and Employee Sale, a −50 penalty to Return to Vendor, and a +100 bonus to Scrap — a hard exclusion expressed as arithmetic, so hazardous items cannot be donated or sold to staff no matter what the other signals say.

When two channels tie, a fixed priority order breaks it: Return to Vendor → Liquidate → Donate → Employee Sale → Scrap.

What the confidence score actually is

The confidence score is the winning channel's total signal weight, clamped to 0–100.

That has three consequences worth being explicit about:

  1. It is not a probability. A confidence of 80 does not mean an 80% chance of anything. It means the winning channel accumulated 80 points of signal weight.
  2. It is a ranking tool. Its real job is sorting: a candidate at 85 has more, and stronger, signals pointing the same direction than a candidate at 40. Comparing two candidates is meaningful; reading a single number as a forecast is not.
  3. A high score does not mean "act now." It means the recommendation is well-supported. Whether the outcome is right for your business is still your call.

The runner-up channel and its score are also recorded, so you can see when a decision was close.

Where your approval is required

Nothing liquidates itself. Candidates become a batch, and batches pass through approval thresholds before anything executes — by default a second approval is required above 500 units or $10,000 in value, and Scrap always requires a second approval regardless of size. Those thresholds and the per-channel settings are covered in the disposition channels article.

Verify it is working

  • Open Actions → Liquidation. Each candidate shows its recommended channel, confidence, and the reasoning text listing the signals that fired.
  • Sort by confidence to see the strongest-supported recommendations first, or filter by a minimum confidence to cut the tail.
  • An empty list means no product currently trips any of the six signals — on a healthy, fast-turning catalogue that is the expected result.

Troubleshooting

A product I expect to see is missing

Check its age first — the default threshold is 180 days. A product that is merely slow but under the threshold, or one whose discount has not yet had its 30-day window, is not yet a candidate.

The weights are policy, and policy is adjustable — per-merchant overrides can replace any part of the scoring matrix. If your vendor terms or category mix make a different channel obviously right, that is a settings conversation, not something to work around case by case.

FAQ

Does a liquidation recommendation change my inventory?

No. A candidate is a recommendation. Inventory only changes when a batch is executed after passing its approval thresholds.

Why does a candidate show two channels?

The second is the runner-up, shown with its score so you can see how close the decision was.

Can I liquidate something that is not a candidate?

Yes. The candidate list is a recommendation engine, not a gate on what you are allowed to do.