A more thorough explanation:

Identification of goods is a process that allows a buyer to have a clear and identifiable interest in goods before taking possession from the seller. This process is important because it enables the buyer to insure the goods and protect their investment.

The identification of goods can be done in any way that is agreed upon by the buyer and seller. This means that the parties can agree on a specific method of identification, such as labeling or tagging the goods, or they can agree on a more general method, such as identifying the goods by their description or location.

For example, if a buyer purchases a specific car from a dealership, the identification of goods may be as simple as the buyer pointing to the car they want to purchase and the dealership agreeing to sell that specific car. The buyer now has an identifiable interest in that car and can insure it before taking possession.

Another example could be a buyer purchasing a large quantity of lumber from a supplier. The identification of goods in this case may involve the supplier providing a detailed list of the lumber being sold, including the type, quantity, and location of the lumber. The buyer can then insure the lumber before taking possession.

These examples illustrate how the identification of goods is a crucial step in protecting a buyer's investment and ensuring that they have a clear and identifiable interest in the goods they are purchasing.