Stock rotation right

Definition

A manufacturer's capped annual right to return current, saleable stock to it for credit.

Why It Matters

Read the manufacturer's policy and not the seller's hope, because the test is not what is slow. Published policies take back CURRENT, saleable, distributor-stocked product, capped as a share of the prior year's purchases by brand, limited to a set number of returns, usually against an offsetting order and net of a restocking fee. Discontinued stock is exactly what is refused, and discontinued and slow is what a tired shelf holds. Work out how much of the aged inventory would actually qualify.