The first key to a successful hardware store liquidation sale is proper planning. This is the most important element that will determine how successful or ultimate failure for your hardware store. All the planning for the liquidation sale should be done before you begin along with options in case things go wrong. You should have two additional options ready, instead of winging it, because some things will not go as planned.
Here are a few
things you need to plan for before the sale begins:
1. Initial Pricing and future markdowns schedule
2. How are you going to get shoppers into the store and coming back?
3. What price for your fixtures and how to sell your Nuts & Bolts Bins?
4. How are you going to keep your employees from leaving during the sale?
5. What kind of signage/banners do you need and how will customers know your sale prices?
6. What is the plan to get rid of the remaining inventory that does not sell at the end?
7. When are you going to get ready for the sale and let customers know when the sale starts?
8. How long will the sale last and when can customers get their fixtures?
9. How and when to contact the press about your liquidation and much more?
Before you start your hardware store closing, there is a lot of work that needs to be done. Here are a few tips.
When Your Sale Will Start–The time to start your sale should be Wednesday or Thursday. You should make a guideline on how long the sale will last, but adjust if needed.
Employees–You need to decide when to tell your employees. I would suggest 7 – 10 days before the sale starts. Also, you need to have a plan for keeping employees around the entire sale such as offering a bonus for staying to the end.
Pricing–You need to set your initial pricing and what your pricing will be in the future. This helps you set the length of the sale.
How to Let Customers Know–The most effective way is by sending postcards or letters to the surrounding area. You should send out at least 5,000 if you have $100,000 or more in inventory
What to Do With Inventory at End–You can sell it in bulk like in 4-foot sections or you could donate it.
What Fixtures to Sell–You must decide what fixtures to sell, your pricing and when the customers can take them.
Signage & Banners–Decide what signage and banners are needed to let customers know about your sale, policies, pricing and more.
The key to a successful hardware liquidation sale is to create a shopping frenzy and keep the momentum going. Most owners managing their sale takes many more weeks, a lower rate of return and more leftover in merchandise and fixtures. Most store owners with an inventory cost of $100,000 or more would get a higher return after expenses with a professional liquidation company and a lot less stress. You only get one chance to have a store closing sale, and if the liquidation goes badly, it will be your final business mistake.
You should check out other liquidation sales if possible, but every sale has its differences.
The key to selling fixtures is to have only one person handle it. Otherwise, items will be double sold. If the person in charge of fixtures is not there, have the customer fill a form with contact info and what they are interested.
As for pricing,
I research Craigslist and eBay, but the best source for me is knowing the
selling price from previous sales. One thing to consider depending on the item,
you may need to be a little cheaper because of your time frame during the store
If I cannot find any information on an item, go 25-50% of the cost. The more item can be used in a house such as a bookcase and glass shelving the higher price you can get.
Lozier shelving pricing varies depending on the market and condition of the shelves. I sell a four section with base shelf for $25-$40 and $5 for each shelf. Longer units are harder to sell, so I give a discount on those.
Most stores have a discount of 20% off or more to start the sale. I price about 90% of the merchandise to start the sale with a discount of 13% off. My best sale did over $150,000 with this discount resulting in $10,500 additional dollars in their bank account by using 13% off instead of 20%. The key is pricing the other 10% with additional markdowns. I discount clearance and out of season items 50% off.
I have a few things 33% off and the rest 22% off to start. You must have good merchandise with additional discounts.
For example, Christmas items would be 50% off unless it is fall. For hardware stores, I start Paint & Stain and Furnace Filters 22% off and Rolls of Wire, Chain, Rope & Tubing 33-50% off. These are excellent items to give a good perception about your pricing. Do not take an item you already have a discount and make the price higher during the sale. You risk a severe backlash on pricing.
Also, I had conducted two sales where the store owner raise prices a few months before the sale started. In both cases, the sale started lower, lasted longer, and the total return was among the lowest of all the sales I have done.
I change prices 4-7 days after the sale starts. Once most items are ½ off, I keep prices for 10-14 days at 50% off. Some sales, I need to adjust this based on the customer traffic. My largest discount is 80% off at the end of the sale. I put prices on entire 3 and 4-foot sections to sell merchandise. Sometimes, you can get the customer to make an offer, but they are afraid to do so.
Running a successful hardware liquidation sale is hard work and stressful. While these tips are helpful, if you run your own sale, there is a high risk of failure. I base many decisions that I make on my experience of 15+ years of conducting dozens of hardware store sales.
While the larger companies store closing consultants, do many sales. I managed hardware store sales and have done several that the owner had several other stores, which brings new challenges.
Call DWS at 1-800-771-5119 today to see if we can help you turn your inventory and fixtures to cash. If you have DWS handle your sale, ask for Jerry if he is not busy with another sale. I only do 3-4 sales yearly, so don’t wait.