There are some things about the end of another year that are so comfortingly predictable. The holiday party hangovers, the joyful anticipation of a week-long vacation, the sweet sense of nostalgia that kicks in as the new year approaches… and oh, the sales!
Marked down! Discounted! Not to be missed! The shouting comes from all directions as traditional retailers do their best to tempt you with their discount deals.
But is a bargain really a bargain? How can companies afford to offer such extreme discounts? And who is the real winner when it comes to shopping end of year sales?
It’s important to understand that some sales are an anchor in the retail calendar. End of season clearance periods between November to December (winter), and June to July (summer), are always scheduled in advance in traditional retail. There are often even more sales planned for mid-season clearances in the middle of spring and fall. These types of sales are ones that will keep coming around year after year, that you are very likely aware of, and know to wait for to shop.
We thought it might be useful for you to know what the Real Deal is on traditional retailers, and how they strategize for these sale periods.
The ‘Markup’ to Markdown’
Traditional retailers wouldn’t offer the discounted price if there wasn’t a profit to be made. Discounts of 60, 70 and 80% off might leave you wondering how the hell they keep the lights on at these prices. Don’t you worry, they’re doing just fine. The industry standard among traditional retailers is to accommodate the sale price by giving it a steep initial markup. Buying something at full price means you are paying an average of 6-8x markup, and likely, a whole lot more than that when it comes to categories like outerwear.
Buying Grana means you will never pay more than a 2-3x markup at full price.
Planning for Sale
This steep initial markup by traditional retailers means that ‘not-to-be-missed’ sale offers are in actual fact, carefully planned and built into the original retail price, and will still deliver big profits at the end of the day. Each sale season is strategically mapped out ahead of time, and a big end of year blowout sale is just one strategy they use to increase top line profits.
Our No-markup Sale
We’re having a no-markup sale for a few key reasons and we will always be straightforward with you about these. Our no-markup sale is happening because:
- we need to make room in our warehouse
- we have too much stock
- we want to free up capital and space for cool new stuff next season
That’s it. No dishonest profiteering, straight up – you pay what we paid. Good for us, great for you.