markdown best practices
Post on 24-Jan-2017
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Markdown Best Practices
MARKDOWN IN SEASON
If products aren’t selling at full-price and the season is dwindling down, it’s
time to start marking down products. Customers will feel like they are really
getting a deal on something they can use right then, rather than something
they won’t be able to use until next year.
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MARKDOWN AT LEAST 20%
Don’t waste time gradually increasing the markdown percentage. If you
do that, you may end up hanging on to the item too long and miss out on a
chance for a sale.
Instead, start at 20% and move items out more quickly.
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LIMIT SALES
Decrease the frequency of sales, so that your customers don’t lose incentive
to come in and pay full-price for items. Aim to have full store sales only
once or twice a year.
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HAVE A CLEARANCE SECTION
You should have a section of your store that is dedicated strictly to clearance
items. Make sure you have clear signage directing your customer to sale
items and make that area in the back so that shoppers have to walk past
your new merchandise.
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CONSIDER PRICE POINT TABLES
To make your customers’ lives easier, you should create price point tables
so that shoppers will know exactly how much they will be paying for a
product. This should be the last stop for your products if they still haven’t
sold after 2-3 weeks on the clearance rack.
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THE RIGHT TIME FOR MARKDOWNS
Markdown your merchandise if it is lacking matching sizes, is down to one
color, or is the last one or two. Sometimes it’s best to markdown merchandise
even before it’s met its shelf-life.
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KNOW WHEN TO DONATE
If you still have inventory that’s over a year old, it’s definitely time to
donate it and create space for profitable inventory. Businesses who donate
to charitable organizations may be eligible for a tax benefit each year.
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