The value of a sale!

Quoting the infamous satirical video, Roscoe’s Rug Emporium “…going out of business since 1957.” and its follow up video “…our going out of business sale was only in its third year.” (Video Here) it is easy to understand and appreciate why the carpet/rug business has been plagued with a negative image of sales. Yet, at the same time sales are a way of life in nearly every retail industry and serve many beneficial purposes, not the least of which being to turn older inventory.

I am a huge proponent of the inventory sale and the management of rug inventories through sales, yet very few companies do them the “right way”. There are of course several options, ranging from a discount outlet, to an annual sale, to a special clearance section, to importers who offer discounts on stock purchases as a way to incentivize inventory sales over Made-to-Order sales. Regardless of the scenario though, there is a common theme: Pricing!
In order to be effective and credible, a sale needs to be a SALE! By that I mean the pricing has to be attractive. Why? Although it is not rocket science, it seems to me some people are hesitant to admit to the fact the reason the item is on sale in the first place is that it possesses some quality that renders it less desirable to consumers in general. And, if it was actually desirable it would have sold long ago. So then, how much of a discount is required to mitigate undesirable qualities? Good question.
Let’s take for example a refused Made-to-Order carpet about 11ft x 12ft, that was rejected because the palate was not as specified due to manufacturing error. In this case, dealing with specific size and colour restrictions removes virtually all hope of selling the carpet for full price (personally I would be willing to say “All” but a slim chance does remain, I guess) and furthermore, the restrictions significantly narrow the audience for this carpet. This of course assumes the carpet is not a spectacular new colouration destined for production. I would sell this carpet at cost* during a sale, to, as a colleague of mine says, “get the cash out of it”.  Some people would argue that there is a customer for that (every) carpet, and indeed there may be at full price, but how many years are you willing to wait for that customer to walk through the door?
I don’t want to get into the myriad of permutations that exist within this topic, but suffice it to say, I feel that the industry as a whole could benefit (both in reputation and financially) from putting more attention toward the proper liquidation of older inventory. No system is perfect (if I invent one, I’ll retire) but one of the best discount sales going is at Odegard. If you’ve never checked out their clearance centre or one of their sales, I encourage you to do as such. As a world of rugs insider, you’ll truly appreciate the value you receive, and as I have, maybe learn a thing or two in the process.
*cost – yes, I do mean the actual landed price you paid for the item.