Inventory Blowout Sale: Fill & Download for Free

I worked for the American arm of a large multinational Japanese company for over a decade. The first faux pas was committed by a fellow American in a meeting with a number of Japanese executives. During the conversation he (thoughtlessly) mentioned dropping an A-bomb in some metaphorical way. Not surprisingly, the room got very quiet. The second faux pas was in the reverse direction. Our business unit had accumulated too much inventory of various products and the marketing person in Japan suggested via email that we should consider a “blow job promotion”, obviously intending to suggest a blowout sale. That little blunder made its way around our office very quickly. It was totally innocent of course, but we laughed about it for days, imagining how we would implement such a plan.

Salespeople are harder, because they know things the average buyer doesn’t.First: Manipulation. Salespeople are aware of the psychological tools used to manipulate buyers throughout the sales process, and less likely to be swayed by persuasive techniques that might work on less observant buyers.For instance, I just received an “August Blowout” sale flyer from the local car dealer promising 15% off this years’ models. Many people would get excited by this, and assume that sales were slow and the dealership wanted more business, hence, great deals. Since I work in sales & marketing, I realized that the dealership is actually trying to offload inventory before new model-year vehicles arrive and effectively depreciate the existing models. (I realize that lots of folks know this - its just a quick example).Second: Negotiation. Industrialization has conditioned modern buyers to either accept or reject an offer, but negotiations are rarely used. Salespeople are aware of negotiations and more likely use them by proposing a counteroffer than other buyers wouldn’t consider.In western society, most people are actually averse to negotiating, which is why people get so excited by car dealerships that promises fair prices without negotiations, etc. That attitude makes sense, because the average person realizes that they’re unlikely to out-negotiate an experienced salesperson and doesn’t look forward to investing time & emotional energy into simply talking down a salesperson from the initial offer to a fair deal.Third: Terms. Non-salespeople believe they’re buying a “product” or “service” - the truth is that you’re never buying either. You’re buying an “offer”, which is product + price + terms.Salespeople understand what offers are comprised of, and more likely to negotiate favorably to themselves. I already covered negotiations, but what I didn’t cover was the fact that salespeople will drill down into offer terms in a way that other buyers wouldn’t even consider doing, which can complicate the sales process considerably.I mentioned an “August Blowout” sale at the car dealership above. Your average buyer might go there, pick out a vehicle, and do the loan with 15% savings. An experienced salesperson might do the same thing, but negotiate package extras, service incentives, and potentially even a lower interest rate on the backend of the deal because they know the dealership is motivated.Summary: The average consumer looks at the purchase process as a somewhat homogenous activity that results in exchanging money for a product or service, but salespeople view each deal as a unique transaction subject to negotiation. This makes selling products & services to them more difficult.

Have you never heard of a "closeout sale"? Or "inventory blowout"? ;-) In all seriousness, retail stores don't want inventory to sit around (it is money on the shelf). Better to mark it down and move it out.Worst case, if a retailer can't move it or they prefer to not do deep discounting, a store might pass it off their aging inventory to a discount retailer (like Ross Dress for Less, TJ Maxx, Dollar General, or 99c Store). The advantage there is they can take all their inventory they don't want and just sell it in one big transaction to the discounter, so it's done and gone.Typical retail markup is 100% (double the wholesale price), so there's usually plenty of room to mark down prices and still make a profit. Even if a store has to keep marking down prices to the point that they're only breaking even or even possibly losing money on product, it's still better to do that and get fresh inventory on the shelves. The goal of a retail store is to get product that sells (quickly) so you can sell more of it. Inventory that doesn't move within 30-60 days needs to be disposed of and dropping the price is typically how that is done.