Despite being a professional writer and long-time Doctor Who fan, Davies had no initial interest in writing for Virgin's Doctor Who novel series, concentrating instead on his television career. However, in 1995 he was interviewed about Dark Season and Century Falls by journalist David Richardson of TV Zone magazine, who later wrote about their meeting. "When we first spoke back in 1995, Davies's interest in writing for the series was evident. With Doctor Who out of production, I suggested he'd be an ideal choice to write one of the novels, and gave him a contact at Virgin Publishing." However, Davies's friend and fellow writer Paul Cornell, who had written several novels for the New Adventures range, later claimed to have been the one responsible for enabling Davies to contribute to the series. "At the time he'd only just started to do The Grand, and we were very much on the same level. We swapped favours — he got me onto Children's Ward, and I introduced him to [Virgin Books editor] Rebecca Levene so he could get to do Damaged Goods."
Davies himself gave his own account of the book's origins in Doctor Who Magazine's 2002 history of the New Adventures range. "I first thought of writing a New Adventure when David Richardson interviewed me for TV Zone... I bashed out the first two chapters in my spare time. I sent in this dead lazy submission, which just said, 'I've got no idea what happens in the end, but trust me. I write'. The arrogance of youth!"
However, Davies found himself commissioned to write for the range by Levene, with his book forming part of the 'Psi-Powers' arc which was over-arching the storyline of the novels at the time, although Davies claimed: "I'm not sure I completely understood the Brotherhood arc to be honest! I just kept it vague and hoped someone else would make sense of it."
After having been commissioned to write the novel, Davies had originally planned to take three months off writing for television in order to complete it. He was then also commissioned to write for two major ITV television series, leaving him very short of time in which to complete the book, eventually writing the manuscript in only five weeks. This sudden amount of work did, however, have the unexpected result of Granada Television purchasing the media rights for the novel on February 2 1997, with a view to Davies possibly scripting a television adaptation for them.
"Granada lent me a researcher, Maria Grimley, to do all the leg-work on the novel, just so I could finish on time," Davies told Doctor Who Magazine. "This led to various Granada folk reading Damaged Goods and suggesting that the Mrs Jericho story would make a good thriller in its own right. It would have stripped out all the sci-fi stuff — including the Doctor, obviously! — and been cut back to just the story of the twins separated at birth... I think the treatment was called The Mother War. Nothing happened with that because I was just too busy on The Grand."
The scene in which Mrs Jericho prepares a dinner laced with rat poison for her husband is replicated almost exactly in the concluding episode of Davies's 2003 religious telefantasy drama The Second Coming, where the leading character of Judith prepares a similarly poisoned meal for her lover Steve. There is an even more direct link to Dark Season, with the novel's epilogue featuring a mention of the main character, Marcie, from that serial.
Damaged Goods contains a gay character, David, and homosexuality is a recurring theme explored in much of Davies's writing, as he himself noted in an article for The Guardian newspaper in 2003. "The first gay character I ever wrote was a Devil-worshipping Nazi lesbian in a Children's BBC thriller, Dark Season. She was too busy taking over the world to do anything particularly lesbian, though she did keep a Teutonic Valkyrie by her side at all times... Once I'd started, I never stopped... I even wrote a Doctor Who novel in which the six-foot blond, blue-eyed companion interrupts the hunt for an interdimensional Gallifreyan War Machine to get a blowjob in the back of a taxi. Like you do."
Davies's major breakthrough television series, Queer as Folk (1999), was centred around the lives of three gay men in Manchester, one of whom, Vince Tyler, is portrayed as a fanatical Doctor Who fan. Although never clearly seen on screen, part of the set dressing for Vince's bedroom as seen in the first episode of the series was a copy of Damaged Goods, included as an in-joke by the set dressers. Damaged Goods itself contains a reference to Why Don't You?, a BBC children's television series on which Davies was working at the time the novel is set.
The Doctor Who Annual 2006, published by Panini in August 2005, contained an article entitled Meet the Doctor by Davies, which referred to "N-Forms" being one of the weapons used in the Time War referred to in the 2005 series of Doctor Who. "N-Forms" are the ancient Time Lord weapons which are featured in the plot of Damaged Goods.
However, not all readers agreed with Owen's assessment that the setting and themes of Damaged Goods were one of its major strengths. "Call me an escapist if you want," Matthew Mitchell wrote in a review for the Outpost Gallifrey fan website, "but if I want a dose of the Problems of the World and Man's Inhumanity to Man, I'll pick up the newspaper. I don't buy science fiction, especially not Doctor Who, for a lesson in modern sociology. I certainly would not have bought Damaged Goods had I known that is precisely what I would be getting."
Generally, however, reaction to the novel was extremely positive, with other online reviews around the time of the book's release praising Davies's work. "In Damaged Goods, Russell Davies has marked himself as the best newcomer to Doctor Who fiction since Lance Parkin eight months earlier," wrote Shannon Patrick Sullivan on his own website "Davies has crafted a taut, compelling novel which falls down only slightly at the end. Certainly, Damaged Goods is one of the best novels Virgin has released in 1996... Damaged Goods is a template for Doctor Who in the Nineties; I hope Davies has the opportunity at a follow-up under the aegis of the BBC."
Sullivan's website also includes a monthly updated list of the most popular Doctor Who novels, "The Doctor Who Novel Rankings", based on votes e-mailed in by readers and running since 1993. As of the January 4 2006 edition of the novel rankings, Damaged Goods was placed eighth in the list of most popular New Adventures novels. In 1998, Doctor Who Magazine ran their own one-off readers' poll to find the most popular New Adventures as part of their celebrations of Doctor Who's 35th anniversary. Damaged Goods received votes from 780 readers, with an average score of 7.295 out of 10, placing it thirteenth out of the sixty-one novels in the series.