Why do items in stores go on sale?

Why do items in stores go on sale?

Is the store trying to get rid of excess stock? Or is it a marketing ploy to get customers in the door? The answer, it turns out, is a bit of both. We explore the different reasons why items go on sale, and how to explain this to your kids.


Related: Ways to teach kids about money


What are the benefits of items going on sale in stores?


There are a few benefits of items going on sale in stores. From a consumer standpoint, it's a great way to save money on items that you may need or want, and it's a good way to stock up on items for later. From a store's perspective, sales can help move excess stock, entice customers to buy, and boost overall profits.


Common reasons why items in stores go on sale


There are many different reasons why products go on sale in stores. Some of the most common reasons come down to selling new products, cutting down on waste, making money, and more.


To get you to try new products


Have you ever noticed how stores tend to put new products on sale when they first come out? That's because they want to entice customers to try them. By offering a discount, stores are hoping that you'll be more likely to give the product a chance. This is particularly important as shoppers tend to be creatures of habit and tend to stick with the products they know.


To get rid of excess stock


If a store has too much of something, they need to get rid of it before it goes bad or takes up too much space. Excess stock can happen if the store has ordered too much, if a product is being discontinued or if a seasonal item didn't sell as well as expected. Whatever the reason, when a store has too much of something, they'll put it on sale to try and move it out quickly.


They are out of season


This is particularly common with clothing, but it can also apply to other seasonal items like holiday decorations or patio furniture. When something is out of season, stores will put it on sale in order to make room for new products. For example, you're likely to see swimsuits on sale at the end of summer, and winter coats on sale at the beginning of summer.


A newer version of the product has been released


This is most common with electronics, but it can happen with other products as well. When a store has the old version of a product in stock, they'll put it on sale to try and move it out before the new version arrives. This is because once the new version comes out, the old one will be outdated and less desirable.


The item has an expiry which is approaching


This is common with food items, but can also happen with other perishable items like makeup or skincare products. When an item is close to its expiry date, stores will put it on sale in order to get rid of it before it goes bad. This is often seen in the form of ‘yellow sticker’ clearance items in supermarkets.


The item isn’t selling


A sale can be a powerful incentive for shoppers and can help move items that might otherwise sit on shelves for a long time. So, if an item isn't selling well, stores will put it on sale to try and boost sales. This is often done in conjunction with other marketing efforts—like advertising or displays—to drive the demand for the product.


So the business can raise money quickly


This is particularly common with businesses that are struggling or going through tough financial times. By putting items on sale, they can quickly raise money to help pay bills or keep the business afloat. It can also be done as a way to raise funds for a new venture or expansion, or clear out old inventory before going out of business.


What do stores do if items on sale don’t sell?


While most stores would love it if every single item on sale sold quickly, that's not always the case. So, what do stores do with all of the leftover merchandise? Here are a few possibilities:


  • Offer even deeper discounts in order to move the product quicker.
  • Donate the items to charity.
  • Return the items to the manufacturer or supplier.
  • Sell the items to a liquidator, who will then resell them to other businesses or individuals at a discounted price.


Of course, each store has its own policies and procedures for dealing with unsold sale items, so it varies from place to place. But in general, these are some of the most common ways that stores deal with leftover sale merchandise.


How to explain items going on sale in stores to a child


When explaining items going on sale in stores to a child, you can use common examples that they are likely to encounter. You could say things like, "those winter boots are on sale because the store is trying to get rid of them before the summer season starts" or "these apples are on sale because they're starting to go bad and the store won't want to sell them anymore."


You can also use analogies to help explain why things go on sale, like "It's like when somebody is moving house and they want to sell all their furniture before they leave, so they offer it to people for a lower price" or "it's like you're running a lemonade stand and you're approaching the end of the day, so you offer a discount to get rid of the last of the lemonade you made."


Using simple language and real-world examples that children can relate to will help them understand why items go on sale in stores.


To develop your children's financial knowledge, GoHenry's Money Missions is a great tool filled with fun and engaging financial education activities to teach your kids the value of money, budgeting, saving and more.


Learn more about the GoHenry prepaid kids debit card today.


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Written by GoHenry Published Nov 1, 2022 ● 3 min. read