fbpx Your inventory is your store’s largest asset so knowing when it’s time to move out old merchandise and make room for the new is very important. No seller likes to markdown full-price products. But the reality is, your inventory only has a 60-90 day shelf-life, meaning if you don’t turn your inventory in that 3 month period, it’s probably costing you money. We have created a timeline that you should consider following for turning inventory.

Week 1: Intake inventory to stock, pricing, put out new inventory

Week 2 – Week 8: Full-price sales and promotions

Week 9 – Week 12: Start markdowns and clear room for new inventory

To make the most of your markdowns, you should be aware of some of the best practices for discounting your inventory: 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 away, rather than something they won’t be able to use until next year. And when customers buy products, even marked down products, they put more cash back in your pocket! 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. Customers will be more likely to jump on items that are marked down at a higher rate. Have a clearance section: Having a section in the back of your store dedicated to clearance items will help your customers. If they are looking for a good deal, they will know exactly where to go. By locating the clearance section in the back of the store, customers will have to walk by all of your new merchandise. You could also consider having price point tables for the inventory that still isn’t selling in the clearance section. Mark everything as “x” dollars to make the purchasing decision easier for your customers, and they’ll feel like they’re getting a good deal! Markdowns are an essential part of maintaining healthy cash flow. Smart retailers understand this and make the most of their marked down inventory. To learn about the other best practices for markdowns, check out this guide!