Traditionally, clearance sales are a way for businesses to clear out merchandise that is out-of-date or selling slowly to create room for new and updated stock. There are many ways to incorporate sales such as buy-one-get-one deals, coupons, and even bulk discounts. You can use these tactics in a multitude of ways to build sales, but what should you do with goods that are hard to move?

Unfortunately, inventory that is not selling is inventory that is costing you money above and beyond your initial investment. Those costs may be not be as blatant as the original invoice, but if products are sitting on a shelf instead of shipping, they are reducing your sales per square foot whether they’re in a warehouse or on a sales floor. So are clearance sales a win-win marketing strategy? It depends on many factors, but done well, clearance sales can help businesses strengthen sales, develop steadfast customer relationships, and clear they way for more suitable stock. Here are some tips to make sure that your clearance markdowns create value:

1. Keep your clearance section spruced up.

Whether you’re an online retailer or have a physical location or find yourself with both types of storefronts, make sure that your clearance section is organized, tidy, and appealing. Shoppers will develop confidence in your offerings when they see noticeable care and concern in maintaining a well-kept presentation regardless of the price point. In addition to displaying your merchandising skills, an attractive virtual or physical display increases the allure of your offerings.

2. Stay consistent with your strategy for determining what is a clearance item.

As noted above, there are many types of promotional sales that can help your business sell more commodities. Many of those kinds of sales are temporary or promotional while the markdown on clearance items should be final and substantial. Seasonal items or items that are dated or unpopular are merchandise that can be put on clearance posthaste. Some stores use post-holiday clearance discounts to continue to boost sales during traditional declines. Develop a system that works for your niche and use it to identify items that are obvious candidates for your clearance sales.

3. Focus on customer satisfaction.

Periodic clearance sales are a great way to bring in new buyers. They may not be members of your ideal target market, but you can build solid customer relationships with budget-conscious consumers who are one or two promotions away from entering the echelon of your ideal customer. Communicate effectively so that customers know exactly what they are getting. If an item is being clearanced due to irregularities or damage, make sure that your customers know the reason for the discount otherwise they may come to associate your brand with low quality.

4. Use targeted ads to connect with thrifty shoppers.

Thanks to the Internet, you can now reach out to specific geographic locations, specific target markets via social media or use customer targeting on your website to alert consumers to your special offerings. If your clientele is smaller and more dependent on geography, you can use flyers or direct mail postcards to alert customers to your business’ clearance sale. Use an appropriate necessary to communicate with your target market to build connection and trust and a more dedicated customers base.