Having a Sale
 December 27, 2006

Q: I am a fairly new entrepreneur and would like to have a sale after the first of the year, as opposed to after Christmas as most businesses seem to do.  What do I need to do to avoid doing it wrong? -- Jenny

A: First off, let me point out that you are on the right track. If you want to succeed in business long-term, then you have to do something different, something unexpected:


Why is having a sale after New Year's smart? Because it is different, unexpected, sets you apart, and therefore is memorable. In an era where advertising and marketing are ever-present, where being heard above the din is a challenge, being memorable is not easy, so kudos are in order for your plan.

That said, know too that there are potential risks when you run a sale. The first is that it can send the message to your regular customers that your normal prices are too high. Similarly, if your brand is one where the price people pay is less important than the quality they get, that is, if your brand is one where people are willing to pay more to get more, then having a sale can hurt your brand.

So how then do you do it right? Here are three vital steps:

Step 1: Stock up, or don't: Your first job is to decide the point of the sale. There are three possible purposes:

  1. As a loss leader: Here the idea is to take a loss on a popular item to generate sales of other products.

  2. To move old stock: Sales are a great way to get rid of merchandise that otherwise has not sold under normal circumstances. Doing so offers the added bonus of clearing space for products that will sell better, so selling the old stuff increases sales down the road as well.

  3. To create new customers: Selling popular products at discount prices is a surefire way to get new people in the door.

So, depending upon the purpose of your sale, you may need to stock up on enough product to satisfy the upcoming demand. If however, all you will be doing is selling stuff you already have and simply want to move it, then ordering more is of course unnecessary.

Step 2: Get your shop ready: Your sale should, ideally, generate some buzz and get more people in the door, so you must be sure that you are ready for the extra attention. You may need more staff on hand and you certainly will need to display properly and prominently the items that will be on sale.

Be sure too that products that go well with the sale items are on display near the sale items so that people can find and buy them easily.

Step 3: Get the word out: Your sale is an opportunity to have an ad with a strong call-to-action, for instance, "call now, supplies at this price are limited," or "this weekend only!" so you must advertise that sufficiently. Get the word out. Let people know about these great bargains. Newspapers, Internet, radio, TV -- it's all good if it draws people to your store.

By the same token, it also helps to have signs, balloons, searchlights, and anything else available to draw attention to your event. That's the point.

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Today's Tip: When I was a little boy first starting to read, I loved going to my dad's carpet store to play on the carpet rolls. One day, while looking at the sign that was always in the store's window I said to my father, "Look dad, look, I can read!" And then, in all earnestness, I looked at that ever-present sign and said proudly, "S-A L-E . . . spells . . . carpets!"

So that's another way to do it I suppose.

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