How to Clear Out Dead Stock While Protecting Your Brand

Do you have a bit too much stock and wish that you could get rid of it, but you’re worried about discounting because you’re concerned about the impact that it might have on your brand? If that sounds like you, then today’s episode is right up your street. Hi, I’m Catherine Erdly. I’m the founder of the Resilient Retail Club and your host today.

You can head over to resilientretailclub.com to find out more about things like my Stock Doctor service, my membership group, the Resilient Retail Club, and my product business mastermind as well. And today we’re going to be touching on my favorite subject, stock management. And what I really wanted to drive home today is the message that if you have got a bit too much stock, this is the prime time for you to be clearing through it.

Christmas comes every year and January sales follow behind. And in the customer’s minds, January and sales just go together. So any activity that you do now is very, very unlikely to have a damaging impact on your brand because it’s what the customers come to expect. For [00:01:00] example, in my house, I actually have a poster from Transport for London, Transport Museum, and it says winter sales more quickly reached by the underground. And it’s from 1925, so a hundred years old.

So we know that this idea of the January sales has been around for a very long time and so it won’t feel jarring or uncomfortable or worrying if a customer sees you discounting at this point. So it is the perfect opportunity for you to take some serious action. What I’m going to do today is I’m going to run through seven key points about how to use your January sale to clear stock.

Welcome to the Resilient Retail Game Plan, a podcast for anyone wanting to start, grow or scale a profitable creative product business with me, Catherine Eardley. The Resilient Retail Game Plan is a podcast dedicated to one thing, breaking down the concepts and tools that I’ve gathered from 20 years in the retail [00:02:00] industry and showing you how you can use them in your business.

This is the real nuts and bolts of running a successful product business, broken down in an easy, accessible way. This is not a podcast about learning how to make your business look good. It’s the tools and techniques that will make you and your business feel good. Confidently plan, launch, and manage your products, and feel in control of your sales numbers and cash flow to help you build a resilient retail business.

Why this is the perfect time to clear out stock

Catherine Erdly: But first of all, why should we be thinking about clearing our stock at this time of year? Well, excess stock takes up physical space, mental space, financial space in a business. And so it’s something that we have to clear out in order to free up cash to bring in stock for the new year. And if you’ve read my book, Tame Your Tiger, done the course inside the membership, or worked with one of our Stock Doctors, you’ll know that the key [00:03:00] for running a profitable product business is for you to be really managing your stock.

And the game is how little stock can you have and still do the sales that you wanted to do? And so one of the ways that you achieve this is by periodic pressure release valves like the January sale where you’re able to clear some of the older stock and release it back as cash into the business So, seven top tips then.

Review your five buckets of stock

Catherine Erdly: First one, if you’ve heard me talk about stock clearance before, then you’ll have heard me talk about the buckets. So the buckets are five different types of stock. And before you do any kind of sales discount activity, the key way to avoid it being brand damaging, apart from doing it at times like this, where it’s actually going to be accepted in the customer’s eyes, The key, one of the key ways is to do a discount that is not off everything.

So we’re talking about where you’re actually being really selective and only discounting certain lines. So what you need to do is identify what should I keep? What should stay? And what should go? [00:04:00] And there are five buckets, broadly speaking, that I suggest that you go through and you look at. The first is your prime stock.

That’s everything that is working really well for you right now that you’re happy to carry on with, that you are really seeing as part of your go forward strategy. Then you’ve got your things that are kind of okay. So you can decide they might take over you probably won’t rebuy them. But there’s nothing really wrong with them.

So you can just let those take over. Then you’ve got your things like your ends of lines. So you might just have one or two of these. If you’re in clothing, this is particularly important because once you get to broken sizing, you generally have to treat things slightly differently than when you’ve got full size runs.

So that might be something you might consider. But you wouldn’t have to take much money off these because they’re generally things that have sold well. They’re just running out, or maybe you just don’t do that type of product anymore, or it’s a collection you no longer really stock. Then you’ve got your slow sellers.

Now, these are the ones that should make up the bulk of all of your discounting. Has anything that you’re disappointed about? That you thought you’d sell more of? [00:05:00] That maybe you just know isn’t working and you just want to clear through? And then finally you have your seasonal stock. Now this is anything that I would call a brown banana.

So this is something that, well, in this case probably might be Christmas stock. Now, Christmas stock’s an interesting one in January. You’ve really got two options. Either you put it away and you bring it out next year or you hit it really hard. So people will buy Christmas products in January sales, but they’re usually looking for them to be somewhere between 50 and 70 percent off.

So you have to decide what’s it worth to you. If you’ve got a lot of Christmassy stock and it’s just going to be taking up a lot of space. And you’ve got a lot of cash flow tied up in your Christmas stock, then I would suggest thinking about doing it January clearance. But you will have to be quite, quite harsh with it.

You will have to discount it quite dramatically. Or if it’s just a few bits and pieces and you think, you know what, this is actually not going to be much of a bother if I just put it away, then that’s something that you could do as well. So you need to kind of make a call on seasonal stock. [00:06:00] If it’s anything else that’s slow, that’s completely non seasonal, like Easter or Halloween, Valentine’s day, I definitely wouldn’t try and clear it in a January sale.

I think we’re really talking about things that are relevant for now. And equally so if it’s super out of season. If we’re talking about clothing and you’ve got shorts, for example, unless they’re workout shorts, because of course, January is a big moment for new year, new you lots of health, all that kind of thing, those kinds of products sell.

If it’s something that is really summery, then I wouldn’t try and clear that too much either. Because ultimately it’s much harder to sell things when they’re really out of season. Christmas is kind of borderline because, of course, Christmas is gone, but people are still thinking they may have not packed away their Christmas stuff yet.

So they may think, “Oh, I’ll get a few discounted pieces, pack them away and have them ready for next year.” So that’s tip number one for your January sale is look at your buckets. 

How to elevate your sales messaging

Catherine Erdly: Number two, if you’re really worried about damaging your brand, messaging does matter. And the great thing [00:07:00] is about sales is you can actually make them sound pretty premium.

The perfect example of this is go and look at Liberty. Liberty have sales just like everybody else, but they are very, very considerate and mindful when it comes to their wording. I don’t think they even really talk about the word stock clearance. Go and have a look at their wording, because it’s really special, the way that they talk about things.

They talk about delightful discounts or amazing offers or incredible products at incredible prices. It’s all of that kind of thing. And I think that’s a great example if you want to talk about a sale in a premium way. Sale doesn’t have to be super. discounty sounding, even if the prices are. It can sound like our treat for you or making way for exciting new nurses.

There’s ways of spinning it that sound positive. So I think if you are somebody who is specifically concerned about the impact on your brand, then go and take a look at the way that Liberty talk about [00:08:00] their sales. 

Set your sales cadence

Catherine Erdly: Number three, think about how long you want to do your sale for and within that think about what we used to call the sale cadence. So the sale cadence is really about the rhythm of the sale how it progresses. And here’s an example. Let’s say you’ve got a four week sale. The first week, your message is go on sale, sale starts, sell begins, or if you’re doing the premium version, our exclusive offers just for you, available now, this sort of thing.

That’s the main message. The second week, you’ve got choices. It could be new lines added. I’m personally not a fan of adding lines in as you go through a sale. I think you should identify what you want to sell and then just move through it. Big retailers do it, if the sale’s maybe not doing as well as they want, or something else has come in and they’ve now I’ve had enough time to realize it’s not selling. So they add that in, whatever else. But I think for most small business owners, you just want to identify your sale and work with that. You could do further discounts i’ll touch more on that in a bit. But definitely something that you could [00:09:00] do and that could be a new message.

So it might go: sale launches, second week is further discounts, third week is up to 60 percent off cause you’ve gone further and you’ve got deep enough discounts, and the fourth week is sale end soon. 

So think about the time period. How long should it be? It kind of depends. If you’ve got a lot of stock to get through, I would go for something like a three or four week sale and I would think about the different messaging and I would be quite, focused on each week, marking things down further if they weren’t moving.

And I would be looking to do things, like extra percentage off at the end of the sale for maybe for specific customers. But just basically, I would be looking at ways to keep the sale moving and to get to do something new with it each week and to push it, push it, push it. If you’ve just got a bit of extra stock, then I do a two week sale, a one week sale.

If you’ve just got a few factory seconds, you could do a story sale on Instagram, for [00:10:00] example. You know, it could be a weekend. You can do like a really deep short sale. If you want to just clear everything out in a weekend, do one sale weekend and the discounts are quite deep. I’d say, you know, a lot of stock to get through three to four weeks is a good, decent amount of time.

So point number four is then, this goes back to what I was touching on is don’t just do one set of discounts and say, “right, well, if it doesn’t sell, then the sale didn’t work.” Every single week when I worked in big retailers, our job on a Monday was to come in, look at the sales that happened the week before and to make adjustments.

So we would be going through the sale products and we would look at how much stock we’ve got left, how fast it’s turning and we would make decisions. Do we hit it again? If it needs to go further. And we would do that every single week. So I must have done that exercise. I don’t even know how many times, a couple of hundred times for sure.

Because big retailers, they’re often on sale or have some sort of sale going on. It depends, but you know, sometimes [00:11:00] 15, 20, 26 weeks of the year between the mid season sales and the end of season sales. So there’s always something to renew. And one of the mistakes that I see small businesses make is that they’ll start a sale and they won’t get much of a result because they took 15 off things.

But then what they don’t do is they don’t go back and do further discounts, further markdowns. 

And I feel like that’s really a missed opportunity because they haven’t gone back and relooked at things and then taken further discounts on the things that weren’t selling. And therefore they’re too quick to say, “Oh, it doesn’t work” or “sales don’t work for us.” And equally so, if you’re going through the sale and you’re not clearing through things, then you really need to be looking to take further discounts.

If your main goal is at the end of the sale to have as little left as possible. Which for most people it is. So you do have to take action and if things don’t work very well with the first level of discount, you have to take it further and see what that does. We always used to say that everything will sell at a price.

You just had to find that key price. So [00:12:00] have a look. If you’re inside the membership, you can go take a look in the Tame Your Tiger course. We’ve got a whole module there all about how to put together a decent sale, and we’ve even got a sale template where you can put your stock in and it will calculate out for you how many days worth of stock you’ve got left. So it’s definitely worth taking a look at. 

Make your sale easy to understand

Catherine Erdly: Tip number five for sale, make it really super simple to understand. Now I saw this a fair amount when I was in Black Friday, things like that. Some businesses just got really complicated. It was like, there was one yoga mat company and it was like three yoga mats, get 20 percent off. Plus, an extra 5 percent for VIPs or something like that.

Anyway, it was too complicated. You want it to be really, really super simple. And we were having this discussion inside the Resilient Retail Club membership Facebook group, actually, before Christmas, all about how do you physically mark down. And in stores, it may not be the most attractive, but the most effective is a “was now” sticker.

So “was now” sticker will have the price that it was and what it is now. [00:13:00] In big retailers, we used to also put on hangers. So for clothing, for example, we would have cardboard hangers that would go on that would also tell you what kind of discount you’re getting. So is it 50 percent? 60 percent? But then we’d always have to have those was nows because most people can’t do mental maths.

So don’t assume people can work out what 50 percent off is. Definitely don’t assume people can work out what any other kind of discount is, because most people just can’t. So make sure you’re always displaying your was and now. If you’re e commerce, then that’s much easier.

Obviously it’s already displayed, but just in general, regardless of how you’re actually displaying prices, just think about keeping it really, really super simple for sale. This isn’t about having tier discounts or this with that or that with this is literally just was now keeping it really, really super simple, so your customer doesn’t get confused. 

Give your VIPs early acess

Catherine Erdly: Number six, give your VIPs early access. So if you’ve got a sale, this is a great opportunity to really encourage people to get onto your mailing list. So you should be talking about promoting [00:14:00] your mailing list to people as an opportunity to find out about your sale and to sign up.

So make sure that you’re giving them early access or maybe they get extra discount. Maybe they get extra 10 percent off at the end, who knows? But for sure you want to be coming up with ways that you can use your sale to incentivize things for your most loyal customers. 

Highlight ethical urgency to shop

Catherine Erdly: And then number seven is highlight ethical urgency. So ethical urgency is what I call it when you are highlighting to people that things really are ending soon or that you really are running low on certain things. Please do share those with your customers because it is a purchase trigger for people. The way that human psychology works is we love a deadline.

We love to know that things are running out or we’re more likely to buy, we’re given that nudge to buy when we’ve got a certain amount of time. So don’t forget to talk about those ethical urgency moments, whether that’s sending out an email with when of things that you’ve got one left of, for example, that’s quite often quite a popular thing to do.

[00:15:00] Last chance to buy, really highlighting that, but then also really highlighting the timing element too. So if you are coming to the end of your sale, do make sure that you are highlighting that and how much time they’ve got left. Even countdown time is when it’s going to end.

Just again, proof that this is not kind of one of these sales that you see on these places where they just always run sales all year round. You’re like, no, this really is my limited time sale. And making sure that you are pushing that to your customer so there you go my top tips for making your january sale help you clear out your dead stock without damaging your brand. And they are identify your buckets, work out what kind of stock you actually want to tackle, and just tackle that stock.

Think about your messaging, keep it premium. If that’s something that you’re concerned about, have a really clearly defined time period for your sale and also work out what your cadence or your rhythm is throughout that time. So you’re not just saying sale solidly for four weeks. Don’t just do discounts once, repeat them.

So review and take action, make it really, really easy to [00:16:00] understand for your customers, give your VIPs really early access or extra perks, extra money off, whatever that might be, and make sure you’re highlighting the ethical urgency, making sure you’re highlighting the end dates and also the remaining quantities

for example. I’d love to hear how you found this episode and if you’ve used it to put together your own sale, why not tag me if you’re going into sale, I’d love to see how it has worked out for you. And if you’ve got any questions, then do drop me a DM on Instagram at resilient retail club. Always love to hear from you.

If you want to know more about joining the club, there is a link in the show notes, or you can head over to resilient retail club. com slash membership. And if you would love to have the time and inclination to look at all your stock, but just know that you don’t, then go check out our stock doctor service as well.

That’s also on at resilientretailclub.com.