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Your January Stock Clearance Strategy · The Resilient Retail Game Plan - retail insights, retail trends and best practices

• 0:00
  Today we're talking about one of the most important tools in your retail toolkit,
• 0:03
  a well run stock clearance sale. Not a panic sale, not a
• 0:07
  blanket discount, but a strategic cash releasing moment that helps you start
• 0:11
  the year lighter and more profitable. I'll walk you through exactly what to
• 0:14
  clear, how deep to discount and how to make your clearance event work for you
• 0:18
  rather than against your margins. Let's jump into it.
• 0:22
  Welcome to the Resilient Retail Podcast. I'm Catherine Erdly and in the
• 0:26
  next few minutes you're about to get powerful real world retail strategies
• 0:30
  and from insights shared both from my guests and myself,
• 0:33
  backed up by my 25 years in the retail industry. Keep
• 0:37
  listening to learn how to grow a thriving, profitable product business.
• 0:41
  Let's jump in with this latest episode.
• 0:47
  Now if you want more information about stock management in your
• 0:50
  business. I've been talking about stock a lot in recent episodes. So for
• 0:54
  example, you might want to take a look at episode 278
• 0:58
  which is about how much money is trapped in your stockroom. What they
• 1:01
  found was once they listed it all out, they had over
• 1:05
  £7,000 worth of stock
• 1:08
  in those plastic totes that had never even seen the
• 1:12
  light of day, so it hadn't even been out on the shop floor.
• 1:16
  Or 277 where we talk a little bit more about slow sellers and
• 1:19
  overstocks. Try a small discount before Christmas to capture that
• 1:23
  Christmas purchasing and then avoid those really super deep discounts
• 1:26
  afterwards. So if you've got slow sellers, think about what you could do if
• 1:30
  you're not into discounting. If you don't do offers at this time of
• 1:34
  year, then perhaps could you focus
• 1:38
  the attention on them more, try and push them more, try and make them more
• 1:42
  of a feature. But in today's episode I wanted to focus in on
• 1:45
  your stereotypical, as it were, January
• 1:49
  clearance sale. So if you're listening to this episode on the day of release it
• 1:52
  is Thursday 18th December, which means that we are
• 1:56
  one one week out from Christmas. And you might be starting to think
• 2:00
  turning your attention to what you want to do post
• 2:03
  Christmas. Now typically a lot of people would have a Boxing Day
• 2:07
  sale or for a lot of small business owners, they want
• 2:10
  to give themselves a little bit of a breathing space and start it
• 2:14
  in January. But either way you may well be thinking about your
• 2:17
  clearance sale. And what I want to do in today's episode is run through how
• 2:21
  to make it as effective as possible. Because a lot of people do get
• 2:25
  nervous about clearance sales, they're worried about them Being brand damaging.
• 2:28
  But the good news is I'm here to tell you that this is the time
• 2:32
  of year to do clearance activity because the customer is used to seeing
• 2:35
  it from retailers. Every single retailer in the land
• 2:39
  is going to be having some kind of clearance event in January.
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  If you walk into a shopping center in January, you are going to see a
• 2:47
  lot of red sale signs. So this is the time of year that you can
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  really be a little bit ruthless if you like and have a really
• 2:54
  good clear out. Clearance is not failure. It's a
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  strategic tale for managing slow stock in your business and
• 3:01
  improving profitability. I also like to think of it as a
• 3:05
  pressure release valve. I am very much hoping none of you ever
• 3:08
  buy stock for your business that you don't think is going to sell. But we
• 3:12
  all know that there are things that you thought were going to sell that just
• 3:15
  don't. Therefore, having a stock clearance sale is your
• 3:18
  opportunity to go through those things that didn't sell and to
• 3:22
  discount them. To release that cash back into your business so that you've
• 3:25
  got more money to spend on new, fresh, interesting stock which is
• 3:29
  going to entice and delight your customer in
• 3:32
  2026.
• 3:38
  So what we're going to do is we're going to talk about when to run
• 3:41
  a clearance sale, what goes into it, how deep to discount, and what to do
• 3:44
  if the stock still doesn't shift. Why stock
• 3:48
  clearance matters. Well, as I've touched on, it is all about
• 3:51
  shifting that slow moving stock that ties up cash and it makes the business
• 3:55
  harder to run. In retail, we call the unproductive
• 3:58
  inventory, that is the 80% of your stock which is generating just
• 4:02
  20% of your sales. Or the inverse of the 80-20 rule where
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  80% of your sales is coming from 20% of your stock. We
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  call that the tail. And in my book Tame youe Tiger, I
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  talk about the bigger the tail, the bigger the tiger. In
• 4:17
  other words, the more stock that you have tied up in that
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  unproductive tail, the more likely your business is going to be
• 4:24
  to be cash hungry and difficult to manage. So you need to make
• 4:28
  sure that you address that tail by running a stock clearance event. Clearance is
• 4:32
  the equivalent of cleaning out your garage. You won't get what you paid for it,
• 4:35
  but you'll get your space and cash back. As I mentioned in previous
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  episodes, what people really fail to realize with
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  Overstock is that it takes up physical space, it takes up
• 4:45
  mental space. It is something that just. It's a lot of
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  time you have to shuffle it around or work around it. And it also
• 4:53
  leaves a hole in your bank account where fresh cash could be
• 4:56
  sitting there waiting for you to make your purchases in
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  2026. And one of the reasons that people
• 5:03
  don't pay themselves in their business, people don't pay themselves enough in their product business.
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  One of the big reasons is that they have too much stock. And
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  so getting on top of that and clearing it through is a really crucial
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  part of running a profitable business. Remember, your aim
• 5:18
  during this time is not to maximize your margin per item. It's to
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  liquidate stock efficiently and effectively reset your business.
• 5:30
  So as I mentioned previously, we are coming up to the perfect time to run
• 5:34
  a clearance sale. A big retailer will typically run four
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  sales a year. Two large end of season sales in January
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  and in the summer, and then a mid season sale roughly around March
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  and then September or October. However, I think for most
• 5:49
  small businesses, they don't necessarily need those mid
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  season sales. I think two stock clearance sales a year would be plenty.
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  And for some people, they actually will just really focus on one. And if you're
• 6:00
  going to focus on one, make it the January sale. Because as I said, that
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  is so intrinsically built into the customer's mind
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  that this is the time for sale, that it is not going to feel
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  brand damaging at all for your customers. It is going to be
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  something that they just see. Oh, yep, I get it. It's this time of year.
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  It's January, let's go for it. This is not
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  the same as being on a discount treadmill. A lot of people are fearful
• 6:25
  of having discounts because they feel that the customer is going to
• 6:29
  then want to just buy from them at discount. But again, that's why this
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  January time frame is so powerful. Everybody knows that there's a stock clear
• 6:37
  out in January. They don't then expect to be able to buy things on discount
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  the year round. You can have other events as you
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  go throughout the year. Even if you only have one stock clearance event,
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  you can have other targeted clear as you go discounts. So that would be
• 6:52
  really super specific on one particular product area.
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  Maybe you're really heavy on your home fragrance, for example, or maybe you're really heavy
• 6:59
  on your summer items if you're a fashion brand. But you would be
• 7:03
  able to take some action to clear those down throughout the year. But in
• 7:07
  terms of the real stock clearance, what we call red sale,
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  that is something that you would keep for, as I said, once or twice
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  a year. So what do you actually put into your sale?
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  Well, I like to think of there being different buckets of stock.
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  So you've got your prime stock. This is the products that make up
• 7:26
  your 80% of sales. Those ones you do not want to touch.
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  What you're looking for are either things that have really slowed off.
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  For example, they are last
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  sizes in a size run, or maybe they belong to a product range that
• 7:41
  you no longer carry much of. They make great fodder for sale because
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  they're actually effectively prime stock. It's just they're not really selling that much because
• 7:49
  you maybe have de emphasized that product range or that product area
• 7:53
  within your business. So it should sell, sell. Once you've taken a bit of money
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  off it and you've put it in front of your customer in a sale. The
• 8:00
  other thing that you may want to include
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  is things like shop soiled or damaged items or seconds.
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  Sometimes people will run a separate samples and seconds sale
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  that can sometimes work well as a second big discount sale of the
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  year. So for example, you might do your stock clearance in January and samples and
• 8:19
  seconds in the summer. That could be another option. But if you are going to
• 8:23
  include damaged or second products in your sale, make sure that
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  it's really, really clearly marked as to what exactly it is and
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  what the faults or the flaws are so that people aren't disappointed if they think
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  it's just slow moving stock that's been discounted, that they understand there's another
• 8:38
  reason behind it. And then the third and probably the biggest
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  category is the slow moving stock. These are things that you just
• 8:45
  aren't selling as well as you thought. They are also things
• 8:49
  that maybe you just bought more of than you needed. So it wasn't
• 8:53
  necessarily that they're bad, it's just that you've got too much left of them.
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  Effectively, what you want to think about with this stock clearance
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  sale, I want you to really think about the things that you've effectively
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  come to the end of the line with. In other words, if you think you're
• 9:08
  going to be restocking something later on, don't put it into the stock
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  clearance sale. The stock clearance sale is the exit shoot for the business.
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  So you're putting things into it that you are done with that. If you don't
• 9:19
  sell it at that price, you're going to keep reducing it until you do sell
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  it. There's no concept that you're then going to put it back up to
• 9:26
  full price, for example. So I would say that once something goes into
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  the sale, it's on its way out and you will do whatever it Takes to
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  clear it down. So don't, as I said, put things in that you think, well,
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  actually, I might sell a bit more of that later on if it's just slow
• 9:40
  because it's not the right season for it. For example, if
• 9:43
  you've got Halloween product, don't try and mark that down in your Christmas sale.
• 9:47
  That's going to be really tricky for you to sell. You're better off almost keeping
• 9:50
  that and then bringing it back out again or relisting it. At
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  Halloween, you want to be looking at the things that have had a good run.
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  They've had, you know, a couple of months to sell, but they're just not
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  selling and now they're clogging up your stock room. And these are the things that
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  you want to really hit and put into your markdown.
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  If something's just a bit slow, you might get away with just not reordering
• 10:12
  it, rather than discounting it. You're looking for the things that are. Either
• 10:16
  you're completely done with or you just. They're really, really
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  slow and you don't think there's any way you're going to sell them, except if
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  you take discount action against them. This is the point at which
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  you absolutely 100% do not want to get caught up
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  in a personal vendetta against yourself thinking, oh, why did I buy it? Why
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  did I make that mistake? Mistake. Do not worry about it. It is not anything
• 10:38
  to do with you. It's the fact that customers are
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  fickle, fashions are fickle, zeitgeist is fickle,
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  people change. You could have bought something that even did really well last year
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  and it's not working so well this year. Don't think about that. Don't get
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  hung up on the mindset around it. Just look at
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  discounting it.
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  How deep do you discount? I believe that
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  you want to start your clearance sale reasonably deep.
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  If you've got loads of something, you probably want to start at 50% off.
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  If you've just got a few left of something and you think it's actually pretty
• 11:15
  good stock, but it's broken end of line, end of a range that you don't
• 11:19
  stock anymore, you could maybe start at 30%. So
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  you're not trying to rescue the margin here, you are trying to release the
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  cash. We used to have a saying in big
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  retailers that I worked in when we were looking at sale, everything has its price.
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  In other words, if it wasn't selling, we would take it to the next
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  discount level, but we would always start off with what we thought
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  was reasonable. We didn't go in at the maximum discount. If you want, you could
• 11:45
  start everything at 30% off. The key with the sale is then to keep
• 11:48
  reviewing it and seeing do you need to take further markdowns. The key
• 11:52
  thing really is don't try tickling things at
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  10% off, 15% off. That's not really sale price, that's more like
• 11:59
  a limited time discount. I would say 30 to 50%
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  is a good place to start. And then one of
• 12:07
  the steps that people really miss out on sales planning is that they kind of
• 12:11
  are a bit apologetic about it. They're like, oh yeah,
• 12:15
  I've got this sale. And they don't shout about it. Whereas you need to plan
• 12:18
  your sale like it's a product launch. You need to be making sure
• 12:22
  that you're going through and you're building up the messaging, you're reminding people
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  your homepage reflects the sale, your social media campaign
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  reflects the sale, and you've got really clear signposting in
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  store or online, depending on your business model to say that we are
• 12:36
  currently on sale. Think about the windows being
• 12:40
  blocked out. In big stores. They literally get these floor to ceiling
• 12:44
  sale banners and they cover the whole window with them because they are trying to
• 12:47
  get your attention. They're trying to say, hey, we're on sale, come
• 12:51
  in, take a look at the bargains. That's the kind of thing that you want
• 12:54
  to think about. And again, if you can switch your mindset and see that this
• 12:57
  is a natural release of cash flow into the
• 13:01
  business, this is not something that you do because you failed or because things didn't
• 13:05
  go well. This is something that you do to make your life easier. Hopefully
• 13:09
  that will help you really shout about it. And inside the retail podcast sales
• 13:13
  game plan course that we've been running, we had a whole session all about promotions
• 13:16
  and sales and we had a sale planner to help you really nail your
• 13:20
  messaging. Because I really believe that this is one of the reasons that people
• 13:24
  don't have as successful sales as they would like is because they put
• 13:27
  a few things on sale. They usually don't discount it deep enough. They might
• 13:31
  put a few things on 20% off and then they don't tell anyone about it.
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  Whereas what you really want to be doing is starting off with a decent discount
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  and then really shouting about it. So have
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  a think about in your business, what's the equivalent of a giant sale
• 13:46
  poster? If you've got a window, maybe you can do that. If you're
• 13:49
  an online business, what's the equivalent can you black out or
• 13:53
  block out your social media as it were, so that all of the posts are
• 13:57
  talking about the sales so people could really get the message that you're on sale.
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  Because remember, this isn't forever, this is a short space of
• 14:04
  time. You just got to shout about it as loud as you can because you
• 14:07
  really want people coming in and checking out those bargains.
• 14:14
  Fun fact. Actually a lot of people find when they turn on a clearance sale,
• 14:18
  they actually see that their full price sales go up as well, which they often
• 14:21
  are not expecting. And that's because people are coming, they're having a look at
• 14:25
  what's in the sale and then they're going, oh, this is a really nice product.
• 14:28
  I haven't bought from them for a while or I'd forgotten how nice everything is
• 14:31
  here and then picking out some other pieces as well. So we always used to
• 14:35
  see this in big retailers. We would see that when we do
• 14:38
  clearance sales, it would actually also push full price sales. So there's definitely something
• 14:42
  for you to think about. So what if it still doesn't
• 14:46
  shift? This is a question I get asked a lot about sailing and I
• 14:50
  think a lot of the reason, as I said, people don't see a good shift
• 14:53
  in their sale is because they don't shout about it enough, they don't
• 14:57
  make enough of a deal about it and they don't discount deep enough.
• 15:01
  If you're in the position where you've launched the sale and it's still not
• 15:05
  shifting, then I would suggest that you go back and you look at your
• 15:08
  discounts. If everything's at 30, could you take some of that stuff to 50?
• 15:13
  If everything's at 50, do you start moving some things to 60
• 15:17
  or 70? How can you keep shouting about
• 15:20
  it? Again, big retailers, they run sales over quite
• 15:24
  a long period of time. So it might be eight or nine weeks of sale.
• 15:28
  And then what we would do is every Monday we would go through and we
• 15:31
  review the sale lines and we would look and decide if we were going to
• 15:34
  take further action on things. Right, do we want to take a further markdown? What
• 15:38
  do we want to do? What should that price be, what's the cost
• 15:42
  of the business, and so on and so forth. So it was never something
• 15:45
  that was one and done. We would never just launch it and then, you know,
• 15:48
  let it just sit there. We would actively manage that sale week on week
• 15:52
  and we would be reacting to the sales that we were getting. So
• 15:56
  the same thing for you too. If you launch it and nothing happens,
• 16:00
  ask yourself, did I shout about it enough. If you shouted about it a whole
• 16:03
  bunch of times and you really feel like nothing's happening or you're getting lots of
• 16:07
  visitors but your conversion rate's not good, think about do you take your discounts
• 16:11
  deeper? That's a whole new round of messaging.
• 16:14
  You can have new lines added, further discounts, or
• 16:18
  now up to 60% off, or now everything
• 16:22
  from 10 pounds, whatever it might be, think about
• 16:25
  moving that sale on. Think about looking at what's selling
• 16:30
  and letting that sell through at that price. But then if it's not moving, do
• 16:33
  you take it further? Discount it further? As I said, we used to always say
• 16:37
  everything has its price, so what price do your products need to be
• 16:41
  at? You can also do extra messaging like VIP.
• 16:44
  Customers get an extra 10% off the last 48 hours only. There's lots
• 16:48
  of different ways that you can lean into the sale and
• 16:52
  keep it interesting and different as you move through. Maybe you have a three
• 16:56
  week sale and you have different messaging each week. Maybe you offer
• 16:59
  three for two on your sale items for the last 48 hours only.
• 17:03
  Who knows? But just keep layering on that messaging, keep
• 17:07
  moving the discounts forward and don't be afraid to be
• 17:11
  aggressive with your discounting because again, we're talking about, this is the
• 17:14
  exit shoot. Once it's in the sale, that's it, it's on its way out. So
• 17:18
  what do you need to do to give it that push? And then at the
• 17:21
  end of it, you should have a decent amount of cash and more
• 17:24
  space and more headspace in your business as well. If you get
• 17:28
  to the point where you really have done everything you can and you're still sitting
• 17:32
  on a lot of stock, it may be worth thinking about
• 17:36
  donating to charity. Talk to your accountant, find out if there's actually going to
• 17:40
  be a tax benefit to writing some stock off and donating
• 17:44
  it. That can be another way of getting some older stock out of your
• 17:47
  way and helping the business financially in some ways.
• 17:53
  A lot of big retailers, they also run clearance channels,
• 17:57
  so they will run ebay shops or depop shops. You might
• 18:01
  not even know looking at it that it belongs to that particular
• 18:05
  retailer. They're busy selling off all of the stuff that they couldn't quite
• 18:08
  clear out at rock bottom prices. But because it's a completely
• 18:12
  separate, different sale channel, it's not impacting their
• 18:16
  main channel. So that is something else that you could consider if you've got a
• 18:19
  lot of stock. Sometimes the answer is can you go to an event?
• 18:24
  Can you basically have like a clearance
• 18:27
  event in person. Sometimes you can shift more that way. Sometimes there are
• 18:31
  even specific sale and outlet events that you can look for
• 18:35
  tables at to just sell things off at a discounted price. But
• 18:38
  what you kind of want to do is you want to really push the sale
• 18:41
  as hard as you can for a short period of time and then you want
• 18:44
  to de emphasize it. You don't want to be talking about sale for weeks and
• 18:48
  weeks and weeks and weeks. You want to push it hard and then hopefully sell
• 18:51
  through as much as you can and then be able to put the remainder
• 18:55
  into say, an outlet section on your website or something like that.
• 18:59
  The key thing here is to reframe in your mind that
• 19:03
  clearance is not wasteful. It's responsible stewardship of your
• 19:07
  stock. It's an important way to release cash that is trapped and
• 19:10
  to get it back into your business. You're not encouraging
• 19:14
  over consumption. I know that's one of those things that people are concerned about. And
• 19:18
  I have to say, if you say to me, I don't ever discount, I don't
• 19:21
  believe in discounting, that is completely fine, I will completely
• 19:24
  100% back you on that. But in that case, you have to be very, very
• 19:28
  cautious about how you buy to avoid having these pockets
• 19:32
  of trapped cash. And there are very few businesses, even extremely
• 19:35
  ethically run businesses, that are able to get away without any kind of
• 19:39
  clearance event. Otherwise they just end up with stuff being stuck.
• 19:43
  If you feel like you're not really in a position to do a big January
• 19:46
  clear out, then you can think about doing clear
• 19:50
  outs throughout the year. But it's not as
• 19:53
  beneficial to have a big clear out, say in
• 19:57
  March as it is in January. Because again, in the
• 20:01
  customer's mindset that's slightly different in January. They totally
• 20:05
  will get it. They understand it's part of the January sales. At another
• 20:08
  point in the year it may feel a little bit more
• 20:11
  distressed. So I would think carefully about the timing of it.
• 20:15
  And that's also again, people have different peak seasons. It might work for you to
• 20:19
  have your sale at a different point in the year in terms of next
• 20:22
  steps then that you can take this week. As I said, we are running
• 20:26
  quickly towards the Christmas time period and
• 20:29
  therefore the post Christmas sales. So some practical steps you can take
• 20:33
  this week are have a look at your 80 twenties,
• 20:36
  so your top 80% of sales coming from
• 20:40
  20% of your stock and then vice versa. This is very easily done
• 20:44
  in Shopify. If you're a Shopify user, you can look at your ABC report. You
• 20:47
  do have to add in the product title as an additional
• 20:51
  variable. Otherwise you can't actually see what's in your abc. But that is something that
• 20:55
  you can easily do. If you look at that, then you can quickly identify what
• 20:58
  you're sitting on a lot of stock of. Make sure you're pulling together
• 21:02
  your sale list. So I would identify the slowest moving stock
• 21:06
  with the highest cash value against it as the items that you definitely want
• 21:10
  to look at clearing. Make sure you're choosing a discount
• 21:14
  strategy. You're going to go straight in at 50% off everything. You're going to start
• 21:17
  at 30% and then review it. Make sure you put in your dates in the
• 21:20
  diary, make sure you're getting all your marketing messaging work
• 21:24
  ready to go. And make sure that you put time in to review
• 21:28
  your sale as you're going through it so that if it's not shifting, you've got
• 21:31
  time to actually take action and take it deeper. So good luck
• 21:34
  with planning your sale. I can't wait to hear how it
• 21:38
  goes for you. You can always drop me a message on Instagram at Resilient Retail
• 21:42
  Club and let me know if you've got any questions about
• 21:45
  it. If you really pushed yourself this year and the difference that it made. And
• 21:49
  I will look forward to next week where we will be releasing an episode on
• 21:52
  Christmas Day where we're going to be talking all about how to
• 21:56
  recap the season. Have a great week and see you then.