What is stock clearance?

What is stock clearance?

Stock clearance is the process of quickly selling off inventory to free up capital + storage space. This is usually done by business who have more profitable stock arriving, and either need the space to store it, or the capital to buy it.

What is a stock clearance?

A Stock clearance is when a company opts to sell or discard items without aiming for profit. Such items may include excess inventory, remnants, or returned goods. The company prioritises reclaiming space over the inherent value of these items. To mitigate the impact on its corporate image, the company employs marketing strategies and confidential transactions. Furthermore, companies leverage these clearance stocks for tax deductions and targeted sales.

What is the difference between a normal sale and a stock clearance sale?

The difference between a normal sale and a stock clearance, is that a normal sale is usually for profit. Whereas in a stock clearance sale, products are usually sold at a loss in a retailer's stock clearance plan. This is usually to facilitate buying new, more profitable products.

Certain companies choose to conduct stock clearance away from their primary retail locations. For example, some well-known department stores avoid displaying clearance items in-store, as it may be perceived as tacky and indicative of lower quality. In such situations, a secondary company usually handles the stock clearance process. This secondary entity acquires the entire stock from the original owner and resells it in a separate store, effectively preserving the main company's corporate image and swiftly liquidating the surplus items.

A prevalent strategy employed during stock clearance involves donation. Through the donation of goods, a proportion of the initial cost can be utilised as a tax deduction for the company. This approach offers the additional advantage of relocating the goods away from the store, potentially even to another country. This mitigates the risk of local oversaturation with clearance items, thereby facilitating the sale of full-priced items in the vicinity.

Another prevalent application of stock clearance involves deploying it as part of a targeted sales campaign. For instance, a product currently enjoying success through television and internet sales may experience a rapid decline in demand. Consequently, the original proprietor may find themselves with an excess of unsold items. In response, when introducing the next prominent item, the company may offer the surplus product as a complimentary 'free gift.' This tactic is frequently observed in infomercial sales strategies.