A going out of business sale is conducted by a company or a brand to liquidate Inventory. Before you have the sale ensure that you at least discuss with business consultants on the same so that an impulsive decision does not leave you with huge losses. Having a sale before you exit the market is easier than selling the company as a whole. When selling the company, sometimes you may underestimate the price and get little returns, sometimes getting someone to buy the company becomes very hard.
Liquidating Inventory is more beneficial; furthermore, you can be able to sell every one of your products. During the sale, discounts are offered which attract more buyers. The sale helps you to offload Inventory as an exit strategy while making revenue at the same time.
Figuring out how to have a successful going out of business sale can be a tiring process. However, you can follow well planned strategies so that your sale is beneficial. You have to plan very well for the sale, do not rush. Successful sales take a long time for you to sell the Inventory at a rate that will not make you count losses. Companies such as Irwin’s insolvency can help you manage your assets.
Research on Laws that Govern Going Out of Business Sale
Most states have strict laws for going out of business sales. You cannot just decide that you will have a sale so you can exit the market, especially if you are a registered brand. You require a permit for the sale otherwise, you might be fined for going against the law. You must, therefore, visit the attorney general’s office for the permit or any office in charge or the one which you registered your business with.
It would be helpful to your sale if you undertake the law process earlier so that it does not interfere with the stipulated dates of your sale and that of closing your doors. If you get the permit earlier, you get enough time to plan for your sale and strategize when and how it will happen. Once the legal procedure is done, you can follow the next steps to learn how to have a successful going out of business sale.
Set Door Closing Date
After you decide to exit your brand from the market and obtain a legal permit, you have to set the exact date in which your business will close its doors. This date should be set after thinking through all the processes that the sale will require; otherwise, it will affect the actual date of your sale. The door closing date affects the sale date in that; you must set the sale date in accordance with the number of weeks it will take you to clear all your Inventory.
Some laws state that you cannot sell anything to any customer once it reaches the date you set for door closing. Therefore, the wider the gap between the sale period and the door closing date, the better. You can set the door closing date after you figure out how much time it will take you to offload all the Inventory you have.
List Down all the Inventory you Intend to Sell
Note down all the items you plan on selling during the sale date. Some states have laws that dictate that you must also present a copy of the Inventory you plan to sell to the attorney General’s office. Plan on how you will sell the Inventory, the price, and discount, if any. Ensure you do not undervalue or overprice your items.
You can decide not to offer discounts for items in high demand so that you can get value for your Inventory. Having a list of all the Inventory, you intend to sell will help you estimate how long it will take you to sell all of them. You can also ensure that each one of the items is in good condition since you will be going out of business, and the customer will not be able to return the product if it is faulty.
Consider the Sale Guidelines
Before you set your sale date, there are a number of things you must put into consideration. As stated before, the amount of Inventory to be sold directly affects the sale period or the amount of time it will take you to offload all of the items. If you have a lot of Inventory to dispose of, you have to give yourself more time before stating the exact date that you will close the doors to your business.
If you have fewer items, however, you can minimize the time and ultimately set the sale date, especially if you want to have a quick sale. When setting discounts for your items, begin with the lowest discount rates, and gauge how the sale is going. Sometimes if the items are on high demand, you may not have to adjust the rates.
However, if the sale is going slow, you can increase the rates so that you can offload the Inventory within the stipulated time. You can start from as low as 5% and increase up to 60% or higher depending on how the sale is going. You must also put into consideration how long you want the price reductions to last. You can give yourself a week to gauge how the sale is going before you adjust to different rates.
Set Sale Date
Once you are done with the steps above, you can now confidently set the sale date. It would be helpful if you set the sale date on a holiday or on a weekend so that you can get more customers to buy your items. You might also consider setting your sale date towards the end of the month when most people have been paid so as to have a successful sale.
If you set the date on a busy day, people may not turn up for the sale, and it may take you longer to dispose of your Inventory and to get revenue from it. Ensure that thorough thinking and planning is put into setting your sale date so that you do not have to extend the dates and disappoint your customers. As you set the date, also strategize the rules that will be applied on the day of the sale and communicate them to the customers when you advertise. The rules could include no use of coupons.
Advertise your Sale
After careful planning, you can enlighten people about your intended sale and what you intend to sell. Create an advertising plan so that your intentions are known to many people for your sale to be successful. You can use both traditional and modern methods of advertisement to reach out to people. You can also have store signs for your regular customers to see that you plan to have a sale. In your advertisement, ensure you clearly indicate dates for the convenience of your customers.
You can also put standing boards outside the store so that even passers-by can see the upcoming sale details.
Social media is a very cost-effective and generally successful way of advertising your sale. Take advantage of the presence of many social media users to advertise your sale on media platforms. If your business had an online platform, you can use it for advertising your going out of business sale. Use your website and emails, newsletters for those who subscribed to them. You can also advertise your sale date and details on local radio and TV stations. Maximizing on advertisement is a key guide on how to have a successful going out of business sale.
Implement your Plan and Gauge your Sales
When the day comes for you to have your sale, you can gauge how the sale is going. Remind your customers a day before the sale so that they are on the know. Use the same strategies used for advertising to remind people of the sale. You can adjust the discount rates for the items that are not being bought. Increase the discount rates so that you can ensure that all Inventory is sold.
You have to ensure that prices are clearly indicated and customers well attended to. You can also post your items online to maximize your sales. After the first day of the sale, check for your success and failures. There could be something that can be done to make the days after to be more successful.
Maybe you got more online orders than physical shopping; then, you can post more items for sale on social media platforms or on your website. If there were some items on high demand and they are running out of stock, you can include rules like no shopping for more than one item. If you still have more Inventory to offload, keep advertising the sale on all platforms and in the store so that you can get more buyers. The sale may also be a learning opportunity for your next business to be more successful.
That’s how to have a successful going out of business sale. It takes some effort but worth it.