A crucial element of small to mid-sized businesses is knowing how to sell overstock items and prevent taking a loss on extra inventory. One way to avoid losing inventory is by doing a retail markdown on items.
Retail markdown is offering discounts on items that aren’t selling as much. For instance, as the seasons change, a convenience store might mark down overstocked summer products by providing deals like 50% off beach towels or $5 off pool inflatables. The store may also offer discounts on winter goods like gloves and shovels during the summer.
Small business retail markdown strategies are essential when clearance items remain on the shelves. These goods take up valuable space on shelves and display areas that could be used for hot-selling merchandise and impulse items.
When it comes to clearance items, many consumers may be conflicted about whether or not the product is a good purchase. Marking a product with a “clearance” sticker can either mean that the product is not a popular item or that the business needs to get rid of it since it’s off-season. Most of these products have a fifty-fifty chance of selling off the shelves, and you may need to develop a strategy to make these products more marketable.
The purpose of any markdown is to create revenue by selling excess products. Selling clearance items can be accomplished in a variety of ways. For example, advertising the deal as a “limited time offer” will make the product seem more urgent for customers to buy. When you advertise these products, make sure to use the color red since it is an alarming color that will be able to grab the customer’s attention.
Another option is to arrange the products with discounts on a display according to pricing. The products on sale look more appealing when displayed rather than crammed together. You may also promote great discounts like “buy one, get one free” or “buy one, get 20% off.” This will be more enticing for the customer to buy, knowing that they can get an item for free or another discounted item for them to purchase.
If you do not know how to mark down your merchandise, here are some guidelines on how to do it. According to Shopify, the best way to mark down your products is using the formula: ([original price – sales price]/original) x 100 = mark down %
For example, if you are selling a table that was originally priced for $100 for $50, then your mark-down percentage is:
([$100-$50)] x 100 = 50%
Whatever method you decide on, keep in mind that you need to have a plan in place if you want to sell these products from your company effectively.
Deciding on what products to markdown can be easy if you have the right Point of Sale system (POS). The best POS providers, like National Retail Solutions (NRS), offer specific inventory tracking features that can be operated remotely. A POS system with an inventory tracking program eliminates the burdensome, time-consuming, and mistake-prone process of staff tallying products by hand. The inventory tracking system can organize your products, such as beachwear, summer accessories, Christmas cards, Easter candy, etc.
An NRS inventory tracking system is a key example of markdown strategies for small businesses. It will give small business owners peace of mind that they can check supply from anywhere to see what products require a markdown. NRS, thanks to its wide array of POS features, integrity, and transparency.
Store owners must create additional space to display new inventory; this is accomplished by clearing the shelves of clearance items. Customers frequently make impulsive purchases of discounted items, and customers will be interested in purchasing the products when properly marketed, which benefits both the customers and the company. Customers often believe they are saving money by purchasing the clearance merchandise but are increasing the company’s income. When marking down products, using the strategies listed above, there is no doubt that any business owner won’t be able to sell the clearance items. Additionally, the owner earns more money when selling them; therefore, it goes without saying that this is crucial for any business.
If business owners want to take advantage of generating more revenue, set a calendar for when the best time would be to do so. When an item is not in season, that is the ideal time to put it on sale. For example, when it is warmer outside, a store owner may want to mark down any sweaters or winter accessories since consumers aren’t purchasing those items in the summer. They can also mark down any holiday merchandise such as Valentine’s Day, Christmas, and Easter when it is past the holiday season.