Mentor, Tom O'Toole

What is the best way to shift excess stock? Are discounts the best tactic and, if so, how should I do this?

StartupSmart /

We tend to steer away from discounting at Beechworth Bakery, as I believe it can set up a “discount” mentality among customers who wait to buy only when goods are on sale.

 

Before giving a discount, we will always try and move the stock by doing a mass display of the product. We make it a ‘wow’ feeling – right in the customers’ view when they walk in. We find that by doing this, the product usually flies out the door.

 

But if we do have excess stock, we will sometimes put on special deals. One of the first things we do before any discount or promotion is get all of our staff involved in the process and explain to them why we’re doing the promotion.

 

We first have to sell to them the great benefits and features the customer will get from the deal and what we hope to achieve.

 

If we can get our staff excited about what we’re doing, we are well on our way to making it a sure-fire success. One way of getting them excited and involved is to set up a goal board where the staff can compete to see who sells the most products.

 

We’ll offer prizes such as movie passes or dinner for two at a local restaurant as incentive. A bit of friendly competition does wonders.

 

A smart way to get rid of excess stock is to bundle it with one of our best sellers at a special price, creating a great value for the customer. By doing this, we can get the full mark-up on one product and a smaller profit on the excess stock.

 

Even if that means we sell it at cost, at least we get rid of it. It’s a win/win for everyone, including the customer. And if we can get someone into our shop with a special deal, we have the chance to turn him or her into a lifelong customer who will buy products over and over again at full price.

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