Stock clearance is inevitable when you have some substantial inventory lying around with little or no hope of being able to dispose it off in a manner that can at least ensure a break even if not generating measly profit. Stock clearance has many challenges, most of which are rather common. Every retailer and even manufacturers have to deal with these challenges for successful transition from old stocks to new inventory. Let us address some of these common challenges.
• The first major question is when you should host a stock clearance sale. Many retailers wait till the penultimate moments of acquiring new inventory and plan a stock clearance sale just before the fresh supplies come in. This is a way to go about it but the whole approach can be futile if the target audience is simply not interested in grabbing the discounts offered when they are made available. It is imperative to cash in on days or weeks when the target market is prepared to spend some more money than usual. A store or a brand may be making less money through stock clearance but the consumers would be spending money, regardless of how much they save. While consumers do set aside some money at different times of the year for stock clearance sales, it is not a given that your target market would only prioritise your products.
• The quantum of discount is another major challenge. Offer too little for consumers and they would not be interested. Offer a generous discount and you would have your profits shrinking down to almost nothing. As a company, you have to determine how much you are willing to concede during stock clearance and then you should hold onto that decision. Some companies are rather aggressive and they would prefer to clear their stocks at cost than have inventory piled up with a seemingly uncertain future. If you can create a rush of sorts then your stock clearance sale can be rewarding. This cannot happen with a discount that would not motivate people enough.
• The precise strategy you come up with will determine the quantum of profit. It is not always about discount. Combos and other promotional strategies can work well too. The specific offers will be influenced by the products you have and the kind of target audience you have. If you have hosted stock clearance sales before, use your experience to do a SWOT analysis and you would find the best way forward.