It’s the sign of our times – stores are going out of business left and right. This week, retail sales figures were posted for the country, and not surprisingly, they were worse than anticipated. No store category is being spared. Home electronics, hardware, clothing, sporting goods, and even grocery stores are shuttering their doors and liquidating their inventory. While it’s sad, and you don’t wish for a store you love to go bankrupt, it’s also a prime time for you to step in and find things your family can use at a price well below full retail.
First, let’s talk about liquidator tactics. Once a store’s inventory has been handed over to a liquidator, the 3rd party company comes in and retags the merchandise, marking it up to its highest retail price. From there, they mark the items down. So a camping tent that retailed for $125.00, at the “clearance price” of 20% off, is still going to be $100.00. That’s not a deal when other stores have similar tents on sale for $79.00. If the item you’re interested in isn’t a commonly available item like a tent, and there’s not much inventory left, 20% off retail might be a good deal. Because of the media attention given to stores going out of business, most people will tend to flood the store when the sale starts and the best inventory will move quickly. The general public will be happy at 20% savings and think they got a deal.
Within a few weeks, the inventory starts moving into new percent-off brackets. 30%-50% is where you’ll start seeing better prices, but you’ll still need to be careful that the price your paying is better than someone else’s best sales price. Inventory will stay in this price bracket the longest because of the consumer perception about the value. If there’s an item you’re interested in, shop around at competitors’ stores and check if it’s truly the best price before you buy.
In this savings bracket, the 50% off items are going to be things that are out of season or harder to sell items. A sporting goods store going out of business in May will have the winter items at the 50% off mark because no one is thinking about skiing in May. But commonly used items like footballs or running shoes will be at the 30% off and be slower to move to the steepest brackets.
The liquidators will then move into the 60%-70% bracket, signaling that the store’s last day of business will be within a few weeks. That’s the time to really start digging through the inventory. Look for things you can use, or that might even have a resell value on Ebay or Craigslist.
The store will finish off with 70%-80% off most merchandise, and a few things that are “junk” items are going to be at 90% off. Ninety-percent off makes for a great sign marketing – you know, the guy on the side of the road twirling an “everything must go sign” on a street corner. But most of the 90% off stuff isn’t worth looking through more than once.
Now that you understand the tactics a liquidator uses to mark down inventory, here’s XXX tips for getting the most out of a liquidation sale.
1. If the store has more than one location be sure to check out each store. The inventory at each store will be different based on what they had left in stock before the liquidation sale started.
2. Make a list of the items you’re interested in at each store you visit. Write down the price it’s at, and then go home and compare the pricing online. Amazon.com is a good barometer on most items, and most stores have at least one online competitor you can price check against. If the best price for that tent onsale in another store is $79, you know you’ll need that tent to be at the 50% off bracket during the liquidation sale before you should buy it.
3. If it’s an item you really need and you don’t think it will make it to the next price bracket, buy it at the one it’s at now.
4. If there’s a good amount of inventory and you find an item you want to stockpile, buy one or two at the current discount, and then as it falls further, buy more at the better percent-off bracket to increase your savings. For example, you buy a pair of jeans at the 50% off rate, but they still have them when they are 70% off, by picking up the extra pair, it’s like getting both of them for 60% off.
5. Shop through each price bracket of the sale. Liquidators will not only mark things down, they’ll consolidate inventory from multiple stores, and even bring in inventory from previous liquidation sales from other merchants in hopes of selling it while they have an audience of shoppers to look at the additional items. And because stores will pull more out of the back storage, you don’t know what you’ll find the next time you come through.
6. If you’re shopping for kids, size up and buy multiples. At a recent liquidation sale, I found Columbia Sportswear fleeces for $12.50 – regularly $32.50. I bought a size that would fit the kids now, and then bought the next three sizes for later.
7. Don’t buy what you don’t need. Just because it looks like a good deal, if you’re not going to use it, then it’s no deal at all.
8. Lastly, buyer beware. The policy of every liquidator is “All Sales Final“. Make sure that the things you’re buying are in good shape, that shoes are the same size and you have a left & right foot, and that all the parts and pieces are there. I have no problems opening up a box in the store before I buy it. If I buy a tent, get it home and it’s missing a pole, it’s on me. There’s no returning it. You’ll also want to be sure that warranties on anything you’re buying are still in full effect. This is especially important with electronics.
Liquidation sales are bittersweet. It’s sad to see a 57-year old store leave your community, but don’t feel bad about making their loss into your advantage. The opportunity to save is huge and shouldn’t be overlooked.