WhizBang! has come up with some interesting tips on best ways to handle holiday markdowns on products that you thought might sell well, but for some reason are just sitting on the shelves. Everyone makes poor assortment choices occasionally, but the big issue is how to recoup at least part of the money spent for these products. This money can then be used on better merchandise that might sell at full margin or even higher!
WhizBang! suggests that you mark down the “dogs” sooner, not later. Here is their advice:
Mark down what you realize isn’t selling now rather than waiting until the holiday season is over. This allows you to take a smaller percent off and makes it more likely that you’ll sell more than if you wait until after the holidays.
Create a price point table—that is, grouping lots of items at around the same price point on a table with a sign like “All Items on This Table $10!” The markdown might be small on some items, but very large on others, which balances out your profit.
If you have lots of one item or one category that isn’t moving, try a BOGO (Buy One, Get One Free) promotion. An alternative would be a “buy one, get 20% off the second”. Customers often want to buy similar items for different members of the family, so you may move double the amount of merchandise by using this tactic!
Use great signs in your clearance area and wherever you are offering point of sale markdowns. Let your customers know what’s on sale.
Start your markdown with a percentage that motivates buying. 20% or 30% now is going to bring in more profit than 50%, 60%, or 70% off after the holidays are over.
Train you staff, thoroughly, to sell your regular price merchandise. If this is done well, markdowns will be minimized, bringing you higher overall margins.
Having great POS Software, like NCR’s Counterpoint, will help you immensely in keeping track of what is selling and what is not. With the click of a button, you can bring up an Inventory Report that will show you exactly what your leaders are and which products are the “dogs”, so you can proceed accordingly. What a great feature to help you through your holiday markdowns!
For more information, call us at 800/425-672-4806, or send us an email. We have answers to your inventory questions!