Every year retail companies large and small depend on the stimulus provided by consumers during the Holiday season. According to the National Retail Federation “42 percent” of shoppers expect to see discounts during the holiday’s. This trend, which, has become much more important for larger companies who sell non-specialized items from huge stocks of products has been less beneficial or some small businesses. Just as large companies have greatly depended on these sales and discounts to increase foot traffic, small businesses have relied just as heavy on discounts to keep up and compete, if not simply to turn a profit.
As discounts rise from 25 to 75 percent small business struggle to stay out of the red. The larger the discounts the more foot traffic that small businesses will depend on in order to offset the difference in cost and profit. As the holiday’s approach small business retailers have adopted certain strategies in order cut costs and bring in more clients.
Three Tips to Offset the Costs of Discounting
1. Cut Overhead Costs:
- Avoid hiring additional holiday employees
- Be conscious of costs of utilities
- Run business during peak shopping hours
2. Buy Products That Have A Greater Cost/Benefit Ratio:
Instead of stocking the shelves with the top tier specialty products, choose products that are affordable, will sell fast, and promote the quality of the company. This is how larger companies deplete there stock and replenish in a timely manner.
3. Offer Deals On Old Stock:
A manager’s worst nightmare is year old stock that just keeps recirculating itself and bringing down the overall quality of the company. For products that won’t leave the shelf be creative and offer them as free gifts for spending a certain amount of money. The company will not only be seen as generous, but simply more bang for your buck. And during the holidays getting the most out of every penny is priority number one.