So you own a store.
Maybe you’ve been running it for a long time.
Maybe it’s a family business, started by your parents and passed down to you.
But something new beckons on the horizon.
A new career path, new opportunities, a life of ease and leisure in retirement, or something else –for whatever reason, it’s time to close up shop.
But you’ve run sales events before, right?
So why wouldn’t you run your store closing sale?
Why might you hire a retail store closing consultant when you have so much experience?
The answer is that a store closing sale is different than your average sale, and owners can often end up making costly mistakes when they choose to run one themselves.
Below, you’ll find the top 5 most common mistakes store owners make when running a store closing sale.
1. You Don’t Recognize This Is A Different Type Of Sale
Sure, you’ve run many sales over the years.
Many of them were probably fairly successful, too.
But a store closing sale is different.
The goals are different – you want to not only make as much money as possible, you want to liquidate as much of your inventory as possible.
This sometimes means deep discounts, and sometimes it doesn’t. More on that later.
The marketing is different, too.
When you run a regular sale, you’re hoping to not only increase your sales, but to create new and loyal customers who trust you on an ongoing basis.
You want people to think of your store when they think of something they need, and your marketing reflects that.
But with a store closing sale, the marketing must reflect the fact that there won’t be an ongoing relationship. There’s no ongoing customer loyalty, because there will no longer be a store there to serve loyal customers.
This type of marketing often feels strange to those who aren’t used to it.
Your clientele, too, will likely be different.
In most cases, your business isn’t marketing toward people who are highly price-sensitive.
Offering discounts is fine, but your store isn’t a Wal-Mart.
You aren’t the cheapest in town, but you provide great products at competitive prices.
But now? The cheap, or best value, might not be so bad.
This is different than any sale you’ve ever run before, and your strategy will have to match it.
Most importantly, you’ve only got one chance to get this one right.
With other sales, if you made mistakes you could learn from them and pivot your strategy for next time, but a store closing sale is the last sale you’ll ever run.
If you make mistakes, there’s no next time.
If you’ve never run a store closing sale before – and most store owners haven’t – a store closing sale consultant can help.
2. You Stop Ordering New Inventory Too Soon
When you’re running a store closing sale, you want to liquidate as much inventory as possible.
Naturally, keeping a large amount of your capital wrapped up in inventory is only a good idea so long as you have a store where you can sell the inventory.
However, some store owners will either slow down or put a freeze altogether on ordering new inventory for a year or more before they plan to close.
This is a mistake.
When most of your inventory is last year’s model, or the less desirable items, it’s hard to create excitement to get people to come to your sale.
At the same time, the last thing you want is to be holding a large amount of inventory without a store to sell it in.
When you work with a retail store closing consultant, they often have avenues for helping you augment your inventory with items on consignment, so you can continue to keep the shelves looking full and offer a significant selection of high-quality goods right up to the end.
3. You Discount Your Product Too Deeply
When you’re running a store closing sale, it’s less about your original item cost than turning your inventory into cash.
As a result, you might occasionally need to focus on the cash rather than the margin.
However, some store owners will begin with blanket deep discounts on their entire inventory, which gives them nowhere to go.
This might help you move inventory initially, but if the sale stalls what moves do you still have to play?
When you decide to close your store, there is always a certain amount of anxiety over wondering how much inventory you’ll be unable to liquidate.
However, not having a carefully laid out plan will leave you with less money at the end than if you were to run a more strategic, more tactful store closing sale.
4. You Don’t Discount Your Product Enough
On the flip side, you may have inventory you’ve been sitting on for a long time.
Maybe it’s out of style, or it’s older and looking worn.
You paid good money for it, but if it has been sitting in your showcase for years it may be costing you money.
That piece has tied up dollars and showcase space and not generated any revenue for you.
The same goes for new inventory – it’s fresh, it’s flashy, and it moves nicely.
But if you don’t offer discounts enticing enough, you won’t be able to move enough product.
That can leave you holding more inventory than you’d like in the end, and having to sell it far below wholesale or at melt at the end of your sale.
How do you know where to set the discounts, though?
This is where a store closing sales consultant comes in.
We can help you by analyzing your sales, your history, your market, and finding out the type of sale plan that will entice people to come into the store and buy again and again throughout your store closing sales event.
5. You’re Still Going Above And Beyond
This is sometimes the one that hurts the most.
If you’re like most small business owners, you’ve spent your life building up customer loyalty.
You go above and beyond what someone might expect at a big box store, or even at the competitors down the street.
That sometimes means doing minor repairs or house calls, either for free or cheaply.
And yes, this is a great idea to build loyalty.
In a closing sale, though, these services can cost you time and money.
Your consultant will ask you how you wish to balance these priorities while reminding you that in this short period of time you may have only the time for some things.
In the end, would you prefer to change a challenging watch battery, or sell a diamond ring?
At this point, these “above and beyond” offerings can’t be the main focus of your business anymore.
Your goal now is to have the most successful store closing event possible.
It’s not about being rude or dismissive – but, but about asking the hard questions and putting plans in place to address these challenges.
After all, you’ve worked hard to build your reputation over the years, and many of your customers are your friends and neighbours.
Contact Silverman Consulting Canada
Are you planning to close your store in the near future?
If so, have you found yourself getting ready to make one of the mistakes you see above?
Don’t worry. Call Silverman Consulting.
We have decades of experience in managing store closing sales in a wide variety of different retail environments.
The stakes are higher with a store closing sale.
You only have one chance to get it right.
Let Silverman Consulting help.
It’s quite common for our store closing sale events to generate the equivalent of your previous year’s sales in less than 90 days.
Don’t leave it up to chance – contact Silverman Consulting today and let us help you transition to your next chapter as successfully and seamlessly as possible.
Contact Silverman Consulting& Retail Services today.
Silverman Consulting & Retail Services229 Yonge St suite 400,
Toronto, ON M5B 1N9, Canada
1 (888) 955-1069