Well, it seems like every dang year, the only real negative aspect of an otherwise profitable holiday season lies in the fact that you, the business owner, had to really blow up the inventory to get into the spirit of things. And so, as the year’s end approaches, you find your shop still crammed with merchandise that just needs to go.
Finding creative and money-making methods to accomplish this task can be daunting: it’s an exercise rightly compared to putting the pedal to the metal to pass a slow car on the freeway, only to immediately stomp on the brakes to avoid the semi just ahead. Thankfully, the holiday elves at the HQ office have come up with a five-point plan to help with this onerous yet hopeful task. So before you start humming “Auld Lang Syne” as you haunt the aisles looking for a solution, pull up a chair and read about how you can turn that aging inventory into an asset instead of a liability.
The Mystery Bag
This simple method of getting that outdated inventory liquid again requires one small investment: opaque gift bags! This is a way that works best with smaller inventory items, by the way. Once you’ve procured your bags, fill each with a fun and complimentary assortment of the inventory that must disappear, and price each bag accordingly (the rule of thumb here is no more than $20 per bag) without telling customers the exact contents of each bag. Hey, they should already know what sort of mystery treasures to expect; they’re your customers frequenting your smoke shop, after all. The brilliance of this strategy is it reinjects excitement into merchandise that was otherwise past its prime. The element of mystery creates a sense of risk, and risk creates thrill, which we have dubbed a “natural high” for a reason. To take it to the next level, add one high-value item to one of the bags and make sure your customers know of the possibilities. Suddenly, it’s more than just a mystery bag; it’s a lottery ticket—and everyone wins something.
The Gift Basket
Even if you don’t go the full “mystery” route, bundling is always a fantastic approach, especially around the holidays when gift baskets once again surge in demand. The idea here is simple. Take that slow-moving inventory you need to hustle out the door and sort it into complementary, well-curated collections you can sell as bundled deals, and make sure you package them in an attractive, holiday-themed gift basket. Get creative as you can with it, both with the pairings and the packaging, and make sure you put the end results front and center, so they greet every customer who walks in the door. Gift baskets are the ultimate safe bet for decision-fatigued holiday shoppers. For anyone with an herbal enthusiast on their “nice” list, a stoner-themed gift basket is practically a no-brainer. You finally move that merch; they check off a box—with a basket. Everyone wins.
In-Store Contests
Got static merch on your shelves? Get rid of it—any way you can. Merch you can’t sell should not only be considered a loss but a loss that continues to cost you, both in valuable shelf space and pesky taxes. Sure, Uncle Sammy may see the stuff on your shelf as an asset, but if it’s not moving, it’s just another liability. Don’t be afraid to give it away—but also don’t just give it away haphazardly. Make the giving benefit you. If a product doesn’t sell on its own, the least it can do is help you sell the things around it. Contests drive excitement, and excitement drives foot traffic, not to mention loosens wallets. Customers love winning stuff—even the mere possibility of winning stuff; rewarding their purchasing efforts with participation in a contest to win more can really turn the tables on end-of-the-year profitability while reducing that end-of-year liability. The options are endless: prize wheels, carnival-style darts, trivia, etc. Or just keep it simple and run a good old-fashioned prize drawing.
The “Fire” Sale
One time in my long life, I had a sales manager who hated the term “fire sale” because he honestly believed that customers might think that the term meant that any business that had experienced a “fire” was on the way down. He preferred the term “clearance sale.” I still think he was overreacting because most customers are always looking for signs of a discount, and man, do the words “Fire Sale” make for a big, burning sign.
Granted, this approach isn’t the most creative of the bunch, but sometimes, it’s the simple things that work best. So, if you feel like burning down the house with deep discounts (figuratively speaking, of course), go full bore; just make sure you advertise the living hell out of it on all of your media channels, use bold, bright signage in the store, and slash those space suckers deep; we’re talking 50 to 75 percent. Remember, it’s all about injecting excitement. “Steals and deals” tickle the dopamine button nearly as much as prizes. In fact, studies have shown that people tend to get more excited about a cheap price than an all-out freebie. Just be careful if you couple this approach with the Gift Baskets. If you do, you can’t have any overlap in merch between the two deals. Items in the gift basket need to retain their maximum perceived retail value; if you have a gift basket item elsewhere in the store at 75% off, you’ve lost that value.
BOGOs & Bonus Merch
If the idea of deep discounts and clearance prices doesn’t light up your entrepreneurial gray matter in a good way, quantity-based bonuses are a perfectly legitimate variation to consider and, by some arguments, a better one. Buy One Get One/Buy Two Get One sales strategies can work great if you’re really looking to burn it down, especially if you have a high quantity on a specific SKU. Once again, it’s simple, and it drives excitement—and excitement is what you need.
But if you don’t want to go full BOGO, there’s always the bonus merch route. For example, “Spend $100 or more and get 25% in additional merchandise free.” You can preselect the merch they’ll get and—spoiler alert—the stuff you’re trying to move. By accountant logic, there’s an argument to be made that bonus merchandise as an incentive is better for your bottom line than straight discounts. Let’s break it down:
Let’s say you’re trying to move a specific product that typically goes for $100. For the sake of ease, let’s call it a widget. You could sell that widget at 25% off, but then, you’re losing $25 straight out of your bottom line. But, if instead, you offer 25% more, your loss is simply the wholesale price of the additional merch, which, at $25, is likely around $12.50. Total profit from a discounted sale: $75. Total profit from the bonus merch sale: $87.50. Value to the customer: more or less the same.
