12 Important Points On Managing A Discount Store

Discount Store Merchandise

Working with liquidation merchandise is completely different to the original wholesale concept, and therefore, can be more challenging to sell for some, compared to wholesale factory packaged goods. Nevertheless, they are often in high demand because of the designer brands they include, and can be a very profitable business.

The key difference between an extremely successful discount store, to one that struggles to be profitable, is selling liquidation products in an effective way. That’s why we’ve listed below the main points to be considered when managing a discount store.

Organize The Merchandise

Because liquidation merchandise is normally sold in mixed lots, which contain a large assortment of brands, styles, sizes, etc. it can be a challenge to display this merchandise within a store.

In essence, discount stores must be setup differently than regular retail stores, because for the most part, the wholesale assorted merchandise they work with will not have a full size run of every item or style. This is normal within department store closeouts, and should not be a problem.

Discount stores usually display their merchandise in racks organized by sizes. They separate clothing by departments, (men, women, children etc.) and organize the items by size – all items size Small on one rack, all items that are size Medium on another rack, etc. This way, customers are free to browse throughout the store and choose what they want to purchase.

Appearance Matters, But It’s Not A Deal Breaker

While it certainly adds value in displaying items attractively and investing in some professional store display units, some items can be displayed independently. Placing bins of seasonal and deeply discounted items in the front of the store, can attract bargain shoppers and is always a good strategy, instead of having to purchase expensive display units. As long as items are displayed clearly and marked with price tags, the exact display solution used is not a deal breaker.

Make It Easy For Customers To Buy

Removing the work from customers’ buying experience, and making it more convenient for them, will certainly improve their probability of returning. As an example, if possible, provide customers with shopping carts or baskets for them to use. The fact is: The easier it is for them to shop, and the more they are physically able to carry (or wheel) around the store with them, the higher the likelihood that they’ll buy multiple items.

Signs Matter

Signs are like book covers for stores, it’s the first chance to make the store appealing (or not) to customers. They also define the entrance to stores, and make it simple for customers to find. Many independent stores do not invest in their signs, and use simple vinyl banners that are eventually destroyed by weather and become unattractive.

Investing in a proper sign to highlight your store can be the difference between success or failure. An attractive sign can bring in buyers who are just passing by and creates brand recognition.

Advertise Within The Store

Ideally new arrivals should be highlighted clearly, in order for returning customers to find, but many times there may be too many new items to highlight each item physically within the store. Therefore, a sign on the entrance advertising these latest arrivals, with the original retail price of the items and the great discounted price at which the items are being sold for, is the solution. Doing this and keeping it updated on a regular basis can make it simple for frequent shoppers to see what’s new and get right down to buying!

Promotional Sales

Customers expect liquidation discount stores to be full of great deals and bargains. With that said, there is always the opportunity for offering better deals! Two-for promotions are always a great way to move more inventory while offering a volume discount to customers. These promotions can be customized to different types of merchandise and different quantities. Buy one get one, Buy 4 get 1/2 off 2 items, etc.

Take Advantage Of Seasonal Items

For stores that are open all year, it is wise to take advantage of each shopping season. Holidays are known to bring an increase in shopping, whether people are purchasing gifts for friends, family members or simply redecorating their homes for the season. Therefore, featuring seasonal products and displaying those products prominently is a profitable opportunity.

Well known retailers have the tendency of displaying seasonal products at their stores’ entrances, making it practically impossible for customers miss. This strategy immediately causes customers to get into the seasonal mindset and buying spirit making them spend not only on the seasonal items displayed, but on all other attractive offers.

Do Not Underestimate The Value Of Impulse Items

Impulse items are the small, every-day use items placed near or at a checkout counter. They usually consist of snacks, beverages, as well as small items like jewelry, accessories, or cosmetics. These items can be used in every type of retail business, both in brick and mortar as well as online stores. Having a selection of impulse items at the checkout counter or on the checkout page online, causes customers to engage as they proceed to pay for their purchases. Adding impulse items to checkout locations has been proven to increase sales!

Emphasize Clearance Items

Clearance items typically refers to items that need to be sold as soon as possible in order to make room for new merchandise. Most retail stores prefer to place their clearance section in the back of their stores, as they don’t want it to divert customers from their more profitable inventory.

With that said, discount stores can actually do the opposite! Placing their clearance merchandise at the front entrance of the store, will make every customer who walks in or out look at it. This guarantees much higher exposure for those items and increase the likelihood that they’ll be sold faster.

Items Without Their Original Boxes/Packaging

It is considered common for some liquidation items to come without their original retail boxes or with boxes that are in poor condition. Nevertheless, this shouldn’t affect the potential profit an item can generate!

For example: If a dinnerware set (or any other product) is missing its original packaging, you can repackage the items (with shrink-wrap or something similar) to keep them together and protect them from scratches and still sell them as a complete set! In the end, most customers realize that they aren’t buying a box – they’re looking for a good deal. Honestly, if the price is right, the packaging doesn’t really matter!

Selling Imperfect Items

It is a common misconception that imperfect items can’t be sold at a retail store. The reality is that as long as customers are informed, there shouldn’t be a problem.

For example: If a dinnerware set box is missing a few items, it is important to make a note on the item’s box of how many units of each are missing from the box. It will then be clear to the customer what they’re purchasing, and they can make an informed decision instead of simply being told an item is sold “as-is,” without knowing what might be wrong with it.

The same concept applies to the pricing. If the item’s original retail price was over $120.00, it can be put for sale for only $50.00 to make up for the missing pieces. A handsome profit will still be made, and the customer will be getting it for over 60% off its original retail price!

Consider Adjusting Your Store Policies

Liquidation merchandise is different, and for that reason, the strategy implemented for selling these items may also need to be different. If customers aren’t completely familiar with the concept of liquidation goods, your returned merchandise rate may be higher than usual. However, it is absolutely acceptable to make customers aware that no refunds are accepted for any purchases of items that are sold as-is, or as a final sale.

In order to provide better service and ensure customer satisfaction, offering store credit instead of refunds may be a good alternative. This will keep customers happy without affecting your bottom line. Whatever policy is implemented, it is important to have prominent signs so shoppers are aware.

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