Fashion 311: Why is there ALWAYS a Sale?

image via flckr World of Good

I’ll bet you a dollar that your inbox is overflowing with sale notices.

I know it’s hard to figure out what you should buy and what you should leave behind. I usually just ignore the entire ordeal, but have realized that I am missing out on some good deals…

I thought it might be helpful to explain why the sales happen…because if you know the causes, you can monitor the market, and capitalize on a great opportunity for discounted fashion!

In every industry, a sale usually signals inefficiency in the market. In a perfect world, the manufacturer would make exactly what a retailer knows you will buy…in the right color, size, features, quantity, and price. The retailer would deliver it to you with a generous mark-up and everyone (except you) would be happy.

But in the fashion industry, the game is rigged. Here’s how it works and how you can take advantage of it!

The manufacturer controls a great deal of factors when delivering goods to the retailer, which in turn, must manage those restrictions to squeeze out a profit. And the retailer has few options when it comes to managing those restrictions…and discounting is one of them.

Many fashion lines sell pre-packs. Let’s say your local boutique wants the black button-up top. The manufacturer will only sell the retailer the black…if they also buy the hot pink. Same deal if your local boutique sells mostly smalls and mediums, the manufacturer will force them to buy a size run that also includes x-small and large. All representing excess inventory that will be most likely be marked down.

The cycle for shipping new goods is about once a month for major fashion lines. That means the retailers have to sell new goods quickly to make room for even more new goods. The deliveries are usually in the middle of the month.

So, if you watch new arrivals and have patience, you may benefit from a nervous retailer who is marking-down in order to make space for new deliveries. The largest deliveries happen typically happen in February and September.

Fashion ages faster than bananas – or so it seems. Once a new style hits the floor, the item begins aging and becoming stale. And similar to a grocery store, a fashion retailer has a specific timeline for moving a particular item – maybe because of space concerns, maybe because the item is trend driven, maybe they have requirements about how “old” inventory can be, maybe because their boss told them to sell it fast – the reason doesn’t really matter to you.

But more often than not, the easiest way to move merchandise is to discount it. And that is exactly what retailers do. Discount almost new, but slightly aged, merchandise to make way for the new.

I suggest if you see something that looks slightly ahead of season and have the patience, wait a few weeks and watch the price drop.

Some fashion buyers aren’t good at their job…some don’t even know their customers. Maybe they think their customer base is mid-20s and trend-driven, when in reality, the customer is mid-30s (ahem) and needs classic styling with a trend twist. Maybe they think their customers are rich, when in reality, they have little discretionary income and are very careful how you spend it.

You can take advantage of a buyer who doesn’t understand their customer by shopping retailers who may not be actively targeting you. I bet you will find a few “mistakes” the buyers made that can be turned into big wins for you.

These are the four basic reasons fashion sales seem continuous and never-ending. Tomorrow, I will explain the best ways to take advantage of these situations!