As I promised yesterday, here are 5 tips to maximize your success when you have to take markdowns. If you don’t take markdowns on merchandise that isn’t selling, the cash you’ve invested isn’t producing for you.
There are two types of markdowns – permanent and point of sale.
– Permanent markdowns are for items you want to clear from your store and don’t plan to buy in the future.
– Point of Sale markdowns are for items you continue to stock and you’ve put them on sale for a limited time.
Markdowns are taken when the item’s rung up.
Five Tips for making the most of your markdowns.
1. JUST DO IT! Mark down the "dogs" in season.
Don’t wait to mark down something that you know isn’t selling – especially if it’s a seasonal item. Marking items down in season allows you to take a smaller percent off than if you wait too long. It’s also more likely that you’ll actually sell the merchandise than if the season has passed.
2. Pick a % off that motivates buying.
If it’s a bad buy, don’t try to give a 5% markdown and expect it to sell. Start at least at 20% off. Increase the % if the item still isn’t selling after a reasonable amount of time – but don’t wait past it’s "season".
3. Don’t overdo the "SALE" mode. Twice a year is best.
If you’re always "on sale" your customers will hesitate to buy from you at regular prices. Try to keep big store-wide sales to twice a year at most.
4. Move "permanent" markdowns to a clearance area.
If you leave permanently marked down merchandise mixed in with regular price goods, it’s hard to spot the "great deals". Move all your clearance merchandise to one area so it’s easy for customers to shop.
5. Sign, Sign, Sign
Make sure you have signs highlighting all of your markdowns. Use a big sign for the clearance area and other signs to indicate you point of sale item markdowns such as "All Games 40% OFF". Signs are the best way to make sure your customers know what’s on sale.
Tomorrow I’ll have 5 more tips for making the most of markdowns. Come back for more great ideas.