Clearance Merchandise

[jenfit]

OK so we have 120 day terms after 60 days items are reduced by 25% and after 90 days 50%. We are in a seasonal town and are VERY busy in the winter (we just opened last November). We are always plagued by clearance as I am sure most people are.

We do consignment as well as cash on the spot so the things that are marked down for the 2nd time at 50% go to our BOGO (2nd one free) rack....does anyone have any tips on getting rid of this stuff faster? I thought of doing BOGO (get 2 free) but then I may be better off donating it and taking the write off?

We are thinking of just going to 1 mark down at 90 days and making that 50% off...?

Any suggestions?

Thanks

[tarabornagain]

First off, you cannot donate those items and take a write-off on your taxes. You didn't buy them so you can't write it off...even if reverts to store property, still no go. Careful here; you can get yourself into trouble with the IRS. Even if you buy the items BOR you STILL cannot take the write off because you already write off the COGS on the items. Check with your accountant, but I know this is correct, so please take measures to make sure your books are in order on this.

From the sound of things, you have a clothing store...? 120 days is a loooooong consignment period for clothing. And 60 days is loooooong time for an item to wait for a MD. Our consignment period is 60 days. Within 4 days of items expiring they are OUT the door, whether the consignor is picking them up or we are donating them, they are gone. We simply do not have the space to keep those items around. If something is really fabulous I might pack it away to pull out next time that season rolls around. If it's close to bag sale time (twice a year), I might sort it into the bins for the sale. Otherwise, make way for the new stuff arriving!!!

If your shoppers are seeing the same stuff on your racks every time they visit for six months, they will stop coming so often or stop coming at all. Do you know what your turnover ratio is? (the number of times per year your entire inventory turns over) You can google that for retail clothing stores (the numbers for ratios on consignment stores specifically are pretty hard to find, if available at all) to get an idea of where you should come in and what the industry average is, and how to figure out what yours is. I think that will be an enlightening number for you.

I'm typing this off quick while I'm waiting for a report to print, so please excuse the abrupt language. Not my intention to offend! Hope that helps.

[newenufforme]

I've taken my consignment period down to 7 wks. due to the volume of clothing that I get. At 3 wks it's MD 25%, at 5 wks it's down 50% and at 7wks it's off the floor. I only sell about 60% of intake so there's alot of donations. I teamed up with a local church who runs a "free store " for those in need. They come pick-up the donations twice a month. My consignors are happy with this arrangement OR they come pick it up. I give them until week 8 to come get it or it automatically gets donated. I don't have the space to save it.
My regular customers wouldn't keep coming in every week if I left things on the racks for 90 days.

[Joselyn]

Another thing we do with that end of season stuff is we have a stuff a bag sale twice a year. We are having our end of summer stuff a bag sale at the end of september. We drag out whatever remaining summer inventory is in the store set it up on racks and tables in front of the store and our shoppers can buy a reusable tote that we had made with our logo (goes with the green theme of consignment) and they buy one for $20 and they can stuff it as full as they can from the "yard sale" for that $20...additional bags we charge $10 for. We donate all of the money to our local animal shelter (minus $1 for each bag) so its great publicity for our store, goes to a great cause and gets it out of our hands in one fun day. Its a good end of season sale because we make sure we have our new seasons items out inside the store so people are making full price purchases inside too. I think in this case your donation would be tax deductable because you are making a monetary donation.

[revolvingcloset]

hello Ladies! I just bought an existing shop in a very good location. The shop has been in business for 7 years and is really the "first" of it's kind so I enjoy an existing and growing clientele..My question is don't your consignors mind when you are virtually "giving the clothes away" when you do the "stuff the bag full" thing? I mean how do you reconcile with them?

Thanks and I look forward to being on "board" with you!