16 • Footwear Insight ~ March/April 2023 footwearinsight.com
By Alan Miklofsky
E
very store owner should carefully
craft a strategy for how they
liquidate merchandise. This
strategy will employ various tactics
(think "why, when, where, who and how")
that tie into the strategy and which are
intended to reduce inventory as quickly
and profitably as possible. Your strategy will
include three key areas of focus:
1. Planning For Profitability
2. Marketing
3. Point Of Sale Execution
1. PLANNING FOR PROFITABILITY
Your merchandising strategy should include
planning for profitability. is will help your
company maintain the highest gross profit
margin ratios you can possibly achieve and
in order to make that happen, you need to
execute a plan with a focus on controlling
markdowns. Any retailer can lower the price
on goods, but better retailers understand
how markdowns negatively impact profits
and thinks about executing markdowns on
the back end of a product lifecycle BEFORE
the goods are bought.
• Buying right is a necessity. Your shoe
buyer needs to understand the total value of
markdowns that may occur to liquidate the
entire purchase. e process of considering
the question leads to learning how to
negotiate a purchase that meets overall
margin goals. Good Retailing includes the
exercise of measuring and mitigating risk!
• One aspect of planning for profitability
is proper price point setting. A good buyer
calculates out a "proforma" before he/she
invests in additional runs of closeouts to
add to their clearance inventory.
• A retail business plan includes a ratio (i.e,
RETAIL ADVICE
For more information on Alan, visit his LinkedIn page at: https://www.linkedin.com/in/alanmiklofsky
PROPER CLEARANCE SALE
STRATEGY & TACTICS
