Previously, I listed the first five tips for maximizing the success of your markdowns. I’m listing 5 additional tips that are important and will keep those markdowns moving. Remember, you want to free up cash rather than having it locked up in overstocked/undersold inventory. Some of these tips are all about perception – how you want people to see your store. This is very important not only for now, but for the future.
1. Put your markdowns at the "back of the bus"
If you put your clearance section at the back of the store, you’ll minimize the clutter (because clearance items aren’t always pretty). Your customers will have to walk through all the wonderful regular priced merchandise to reach the bargains!
2. Try a price point table
If you have a lot of items at or around the same price point, try a price point table. For example: "All items On This Table – $10 each". That might mean a 22% markdown on some items and a 48% markdown on others. It makes the buying decision easy for your customers and that moves merchandise.
3. Train your sales staff
Take the time to thoroughly train your sales staff on great selling behaviors. Encourage them to sell regular price merchandise first. This will mean fewer markdowns for you in the future and higher overall margins now.
4. Broken colors, sizes or assortments = markdowns.
A tricky question is "when is the exact right time" to mark merchandise down. Here’s one rule of thumb. If you have a coordinated merchandise group that has hardly any matching sizes, colors or pieces left, Mark It Down.
5. Over a year old? Dump it or donate it.
As I’ve said before, your store is not a museum. If you have basic merchandise that’s over a year old, take a loss on it or donate it to a charity and take a write-off on your taxes. No matter what you do, there’s some merchandise that just won’t sell no matter how low you mark it.
Follow these and the previous 5 tips and see how they can help you bring your inventory under control. Back to the main point. To prevent a recurrence of too many markdowns, prepare a comprehensive Open To Buy plan.
Email CCS or call 800-672-4806 to discuss how our Open To Buy software can give you control over markdowns.