Best Tactics To Avoid Markdowns

 

    1. Pay Attention To Your Gut. If you don’t love it, don’t buy it. That is a markdown waiting to happen.

 

    1. Don’t Pay Attention To Your Gut. If you love it, really love it, want it for yourself, and are worried that it is too expensive – then do order it. Time and time again I find that an item like this will sell. Markdowns are avoided because you have spent your dollars on something that you believe in rather than some marginal items. (You know exactly what I mean – items that you like and think will sell but you don’t obsess about how fabulous that they are.)

 

    1. Don’t Order Too Much. In very rough terms, look at what your sales are trending for the next 6 months and divide that number by 2. Do not order more than that amount. If you do, you are practically guaranteed to have markdowns.

 

    1. Do Order Too Much. If you find an item that you are absolutely crazy about, then don’t be afraid to commit to a scary large order. AND THIS IS THE KEY: make special and specific plans to sell that item. What kind of in store event can you do around it? How can you share how cool it is with all your raving fans? Can you write an email just about that one item? How about telling your team that if they sell x number of it, they get one for themselves? This reduces markdowns because you are spending your money on an item that you are specifically invested in selling…and you aren’t spending the money on other random items.

 

    1. Be A Good Boss. At any job, a good boss is one who holds you accountable for your actions and encourages you to review your past performances. A good boss doesn’t allow you to only take actions based on your gut. A good boss demands reasons for mistakes and wants you to continually improve. Do yourself a favor and be a good boss to yourself. If you analyze your purchases and how they performed you will absolutely avoid future markdowns.

 

  1. Take Fast Action. If something isn’t moving at all within 2 weeks, move it to a different location. If it still isn’t moving, try offering something to motivate your team to promote it – and even promote it in an email to your fans. If after a month, only 1 out of 6 items ordered has sold, mark it down 20%. If you take action on these 3 steps in this time frame, your markdowns will decrease dramatically and your sales will increase as you move your inventory faster.

 

2 Comments on “Best Tactics To Avoid Markdowns”

  1. I am a graduate student currently doing research involving markdown allowances in retail. I am trying to understand more specifically how they work (how are the terms structured? when are things negotiated? how frequently are markdown allowances used?). I’d appreciate any information on the topic.

    1. Hi Adam, Markdown allowances are often treated differently between big box stores and indie retailers. I work with indie retailers and if you are interested in more info I would be happy to talk more about this.

Leave a Reply

Your email address will not be published. Required fields are marked *