Now that the holiday buying frenzy has ended, the first month of a new year can be kind of a drag for retailers. Not only is January a long month, it can be a slow sales month, which is exactly why, back in 1878, John Wanamaker, founder of Wanamaker’s, one of the very first department stores in the United States, came up with the idea of slashing prices for bed linens in his store. He called it a “white sale,” since linens were only available in the color white in those days. HIs idea was a brilliant marketing strategy that is still going strong. After all, isn’t January “White Sale” month?
January is the perfect “slow” month to use the tools you have within your inventory management system to assess what’s left after the holiday buying season has ended. What flew off the shelves? What didn’t move out as fast as predicted? Was forecasting off on some items causing an overstock issue? What is the best strategy for handling items taking up space on shelves now? Is it time for a “white sale?”
If you do have too much inventory sitting on shelves, maybe a sale is the way to go. The question is, how much should you mark down on overstocked inventory and still make out?
Try this profit margin calculator available free from inventory management specialists, Blue Chip. It’s a handy tool to help figure out how much to price an item to make a profit. All you do is enter the wholesale cost, and then add a markup or gross margin percentage. You can enter up to 10 items and save a printable report.
Of course, for overstock “white sale” success, a great discount will bring in shoppers.