Selling to Liquidators

Q:  How is "sold to liquidators" handled if you were to come out with a new model but distributed most of old model inventory purposely to affiliates? Would there be less of a change for the inventory to get sold to liquidators?

A:  A new model is introduced into the market, one quarter after it has been put into production.   If  there are units of the old model remaining at the end of the quarter during which the new model is first produced, the unsold inventory is sold to a liquidator regardless of where the old model units are located.  The new model is the only product available in all areas during the next quarter when the new model is introduced.  Thus the distribution of the old model during the quarter that the new model is put into production has no impact on the number of units sold to the liquidator as all remaining old model units are sold regardless of where they are located.