Going out of Business Sale Tips

We will discuss the many things needed to have a successful going out of business sale. There are many reasons going out of business sales are held including retirement, want to do something else or an unprofitable business. The key to a going out of business sale is to maximize your return, while keeping the sale as short as possible.

Many stores that I go into, the owner is looking to maximize the return, but the initial pricing with other issues cost the store owner thousands of dollars. There needs to be a balance on pricing plus a strategy to get the sale over quickly.

There are many things to do in a going out of business sale. This includes setting up advertising, determining pricing, how to sell fixtures, when and what to tell employees, merchandising the stores as it sells down and more. The emotional attachment to the store can be a difficult thing to deal with in this process. However, you need to make rational decisions that will produce the most return out of the store.

Some of the questions the store owner may have include :

1.How much should you mark down items?
2.How do you advertise this sale, especially the opening?
3.When do you tell employees and how do I keep them from leaving?
4.When do you start getting ready for the sale?
5.What is the best way to sell fixtures and store equipment and supplies?
6.How many and what kind of signs do you need?
7.What day should you start the sale?

There are plenty of other questions, but you get the idea. One last thing before, we finished on the first part of our going out of business sale. Most liquidation companies and consultants (me included) will not get involved with a going out of business sale, if the owner has already started. It is too hard once the sale stalls to get the momentum going again. It is important that this is plan out carefully instead of managing by the seat of your pants to avoid this from happening. Taking some of our tips can help make your going out of business sale more successful.

We will discuss in this installment some of the details to take care of before your store closes to get ready for the sale. First, you should decide what equipment and supplies that you are selling. You may not get much of a return, but at least something is better than nothing.

Selling fixtures is the same way. Glass Cases, bookshelves and anything a teacher can use or a homeowner in their basement or garage bring the best prices. Unusual racks or displays are hard to sell and only produce a few dollars. If there are any going out of business sales in your area, I suggest you look at the prices of the fixtures especially the ones already sold. It is important that fixture sales are controlled by only a few people, otherwise, you may resell the same fixture twice. Also, you must have a system for listing and keeping track of fixtures sold and how to handle them once they are done.

Pricing the store correctly in the beginning is critical to maximizing your return while getting plenty of sales. If you are at keystone, most items should be about 10-15% off regular retail. You must have some larger discount amounts in high traffic areas to give the perception of hot sale prices.

Set the category prices before the store closes. Customers are ready to buy the first 5-7 days of your sale and with these discounts, you will make more gross profit than the standard 20% off or more suggested by many liquidation companies. This gives you more opportunity to take larger discounts on poor selling items.

Everything you can do now will save you when your time is limited. You need signage and a banner or two to let others know about your sale. Proper signage can create 20-25% of your traffic. Everybody should know from either the street or parking lot that you are going out of business and are having a big sale. Order the signs in plenty of time to have them ready for the sale.

Set up details about the employee meeting and when you are going to let them know. Some store owners let them know right away and others at the last moment. There is no right answer, but what is best for your situation.

Need to determine when your sale is going to start and how to let your customers know. Need to determine how long to reprice the store and be closed. The key is to have every area of the store priced so customers know the price when the sale starts. You can put up sheets showing the regular price and sale price.

How do you advertise your sale? It is different in every situation and often involves a combination of things. It could be direct mail, newspaper advertising, oversized post cards, door hangers, radio or TV, internet or using your store mailing list. The key is to have a plan and what you will do during the sale to keep the sale running smoothly.

Most stores take 1-2 days to get everything priced or signed. Your signs should be placed up immediately once you are closed to prepare for pricing. You want every customer who is driving by to know about your sale. Normally, the best time to start the sale is during the week and not the weekend. I would suggest either Wednesday or Thursday .Keeping your door locked is important, Letting people in while getting ready will slow the preparation and hurt the curiosity of the sale. The more you make people curious, the better the sale results will be.

With pricing or signing, you should spread out the employees. If you have too many together, they will talk more and price less. Also, having the employees worry about pricing one particular discount leads to fewer problems. Someone should check all employees to make sure they are pricing at a particular discount correctly such as 20%, instead of 80%.

If you have items on a rack or display with two priced points, it is best to separate them if possible. You can also do some remerchandising of the store now, even though it would be easier to do the week before the sale starts.

Make sure you have all your supplies ready for the sale including bags and plenty of change. Also, have a plan how to handle large lines the first few days of the sale.

For scheduling, besides the opening day through the first week, you can probably schedule the same as usual. The first day is critical to have enough help. It is better to have too much help the day the sale starts and the first Saturday.

Don't forget about pricing the fixtures and equipment. It may not be as important as the merchandise, but if you wait to the last moment, it will leave you with plenty of unsold fixtures. You can either put a set price or take bids on the more popular fixtures such as glass cases and book shelves.

I would not order any merchandise to arrive after the sale starts unless you can sell it in a week or less. Otherwise, you will be selling some of them at a loss later. The purpose is to get this sale done AS SOON AS POSSIBLE.

After the sale starts, you must keep advertising weekly to keep the traffic flowing. You need to evaluate the best methods possible and use them. Having weekly specials will help with the traffic. Special Events during the sale are a fantastic way to keep bringing customers to the store.

The sale will normally go in 2 week cycles. Then, price cuts are needed for merchandise and perhaps fixtures. In many stores, customers shop every 2 weeks and they may be looking for a particular item to see if it has been discounted more. The traffic will start going down every couple of weeks, so cutting prices is needed weekly. Remerchandising the store and getting empty fixtures together is important during this process.

Employees will be going out of getting other jobs during the sale. You need to have plans to cover the store later in the sale. You could offer an incentive for your best employees to stay longer. Also, you must be concerned with employee theft during the sale. Some employees will feel that you wronged them or be upset and take or pass merchandise or money. Just make sure you have controls in place to minimize the chances of this happening.

At the end of the sale, you may want to make package prices on groups of merchandise and fixtures. Also, make sure all hidden fixtures or equipment are worked out to the sales floor. If you follow our suggestions, your sale should have done better than most going out of business sales. Most people learn the hard way in running their own liquidation sales. If you want us to help us in your going out of business sale, I suggest DWS Retail Sales. It is an affordable investment, which will help your sale go smooth during a difficult time.

They can be reached at 1-800-771-5119  or

http://www.dwsretailsales.com