Thought I’d send along this email received from a consignment shopkeeper. The email is from a while back, but I thought you’d like to see it, after the “price slashing” some businesses did for the Thanksgiving weekend.
Hope you don’t recognize yourself in it.
Hey Kate,
Thought I’d send you this for blog inspiration. I have a competitor who opened 6 weeks ago. Initially I gave her some general advice about the children’s market in [our city], etc. Obviously, she didn’t hear a word I said. In fact, when she read on a local online forum that shoppers found her store “too expensive” she posted that all they had to do was ask for a discount because she wanted to make sure everyone could afford her products.
Anyway, here’s the text from her latest ad, about her grand opening weekend.All Weekend
Strollers 20% off
All Clothing 25 % off
Accessories 10 % off
Fancy dresses 60% off
Discount rack 50% off
Baby bottles 20-50% offFriday Blow Out Specials!!
Tommy Hilfiger 40% off
Crib sets and accessories 40% off
Pink chicken dresses 30% offSaturday Blowout Specials!!
Tommy Hilfiger 40% off
Snowsuits 20% off
Fall jackets 35% offMonday Blowout Specials!!
All footwear 10-50% off
Diaper bags 20% off
Yoga wear 35% off
Cloth diapers and accessories 30% off
Thanks for sending this example in to me here on the Auntie Kate blog. As a shopper, I’d be thinking Wow! I’m AFRAID to shop there… ’cause
I’d be a chump for buying it today when, obviously, it’ll be cheaper tomorrow.
And as a consignment consultant, my reaction is
How’s that for giving away the store?
Even if such a shop were “splitting” the price reduction with their consignors (not a practice I recommend), there will be little to zero profit in selling like this… and great damage to the shop’s reputation for fair pricing either.
Auntie Kate The Resale Expert 
Marsha – not sure If understand your comment but what’s the difference with have a “set sale day” vs. have scheduled MD’s? If an item has a set MD then wouldn’t that also “kill sales” just like a “set sale day”? We do something similar as JoAnne does and found that it has not hurt sales for the other days at all. Just like JoAnne says in here comment above, customers realize that they better buy an item if they like it because chances are it will be sold before the scheduled MD or sale.
For the last two years we have a sale at the end of every month. We discount everything that has been in the store for more than 60 days (we have a 90 day consignment policy). We do not discount our consignors items in the first 60 days and when we do discount them after 60 days we share the discount with the consignor. Our consignors love the fact that they know their items will not be discounted for at least 60 days which gives them plenty of time to sell. They also appreciate the fact that that their items have a chance to sell after they have been discounted and right before they are donated.
This policy has worked wonders for our stores reputation and our profits. The great majority of our inventory sells within 60 days at FULL PRICE, so everyone wins. Now instead of donating everything after 60 days, both the consignor and us have another shot at selling those items that haven’t sold in the first 60 days (the only people that don’t like this are our donation partners because the volume of donations have fallen sharply ever since we changed our policy).
At first we were concerned that day-to-day sales would suffer because customers would hold off buying until our monthly sale. But customers quickly learned that if they liked an item that it would likely be sold by the time the sale arrived so this has not been a problem.
Our net profit is up substantially in the last two years.These monthly sales provide a nice shot of cash flow at the end of every month and our customers and consignors our smiling too!
Interesting, JoAnne. You have scheduled markdowns, but you only actually show it at the end of the month in which the item has aged 60 days,if I understand correctly… so some goods could be on your selling floor, without reduction, for up to 89 days… if it came in, for example, on Sept 1, it wouldn’t be due for a MD at the end of Sept or the end of Oct sales… so until the end of November, it’s not discounted?
That’s great, that you have the space to allow merchandise to go so long without a discount and then to use the power of a specific sale day/days to draw a crowd! Most shops MD “as they go”, and yours is a novel approach. Thanks for sharing.
I don’t give away advice…maybe I am wrong but I spend a lot on my ad’s and more time than I have in my shop and with the economy I can’t afford to support my competition. Having a set sale day kills sales for the other days.