Clearance Sales - In what ways does it help a business?

[Etini]

A clearance sale is when a product or products are sold below the fixed price and market price to clear it's inventory. It is a thing that businesses do at one time or the other. So, how does clearance sales benefit a business?

1) Reduction of storage costs: Businesses incur costs as they store products. The longer the product stays without being sold out, the higher the storage costs incurred on it which can erode profitability.

2) Clearance sales provides immediate cash flow: Making clearance sales would give the business some cash that can be used to buy new products or take up some improvements projects in the business.

3) Clearance Sales attracts new customers that might end up being retained: With the reduced pricing in clearance sales, there would be an influx of people who might not have patronized the business before come in to patronize the business. Some of them can turn to repeat customers for other products depending on how the business can build relationships with these people.

 

[Suba]

The main purpose of a clearance sale is to sell old stock of goods that are still stored in the warehouse at low prices or even big discounts so as to attract potential new customers. Once the goods are sold out, the shop owner can replace them with new goods. Clearance sales are also only held at certain times, not every day. Meanwhile, the benefits of clearance sales are as follows:
1. Avoid bigger losses
This will save on storage costs and can also prevent damage to goods if they are stored for too long.
2. Cross-product sales
Apart from clearance sales, shop owners also expect customers to buy other items.
3. Apart from that, the benefit of a clearance sale is that it can also provide space in the warehouse for new goods.