How to sell a stale product

The sale allows you to get rid of old goods and free up money for business development. For example, before purchasing a new collection, the company needs to get rid of the remnants of the old one. Or the store bought a lot of winter clothes, and in February spring suddenly came: warm clothes are no longer bought and they are gathering dust in the warehouse. In such situations, you want to get rid of the stale goods as soon as possible, and therefore there is a temptation to simply lower prices.

But if you do it thoughtlessly, you can work at a loss and harm the business. In order to sell goods profitably, I recommend planning everything in advance.
Choose popular products — "locomotives"

The goods that are in the greatest demand can be used as "locomotives" to sell less demanded things. For example, to assemble sets of two items: to add something interesting to the audience that sells worse, and offer such a set at a discount.

To identify popular products, analyze what your audience is looking for in stores and what they are interested in. To do this, I recommend using free services.

Google Trends. Allows you to find out several indicators: how the popularity of the product changes throughout the year, in which regions people are more likely to search for it and what other topics they are interested in.

Yandex Wordstat. Shows how many people search for a product during the month and what other queries they often enter.

If you have an "Extended" or "Maximum" tariff on Avito, you can use the "Demand Analytics" tool. It helps to analyze supply and demand, track seasonal changes in demand, and compare product categories with each other.
Analyze competitors' offers

Competitor analysis allows you to develop an advertising offer that others do not have. The easiest way is to study the websites of companies that sell the same product. I advise you to create a table with several columns for this:

    pricing policy — prices above, below the market or like everyone else;
    assortment — what products and how many of them;
    discounts, bonuses, loyalty programs;
    terms of payment and delivery.

In order not to waste time collecting company data manually, you can use online services that automatically collect information about competitors in one place, such as Mention or PostMonitor.
Determine the discount amount

To calculate the discount, you need to know two indicators: the cost of the product and its marginality.

The cost price is the amount that the business spent on the production of goods, purchase and delivery.

Marginality is the difference between the selling price and the cost price. It shows how effectively the company sells the product.

The cost of a unit of goods = all related expenses / number of units of goods.

Marginality = selling price — cost price.

The discount amount should be less than marginality. In this case, you will earn money by selling the product. If the discount is equal to marginality, you will work to zero. And if the discount turns out to be more marginality, you will go into the negative.
Think over an advertising campaign

I recommend using several advertising methods and channels at the same time, which complement each other. Choose the channels that gave the maximum effect during the past advertising campaigns. You can also apply methods that work well with competitors.

In my experience, non-standard ideas shoot well. There are a lot of sales, and it is difficult to surprise them, so the buyer needs something to hook. I remember such an example: there was a night sale in the store, during which all employees worked in pajamas. People came to see them and at the same time bought up the goods.

Nevertheless, I do not advise using too complex creatives — customers may not understand what you are offering them. In order for them to come to the sale, the advertising offer must be formulated as clearly, simply and briefly as possible. Please indicate in it the amount of discounts, a description of the conditions, deadlines, restrictions. At the end, encourage customers to take an action. For example, to view a selection of discounted products on the website.

When you have decided on the format of the ad, calculate the budget for it. Here are a few ways:

    compare how much you have already earned and how much you plan to earn, the difference between these amounts is the advertising budget;
    predict how much you plan to get net profit from the sale, and put a percentage of this amount on advertising;
    take the amount of profit for the previous period and put a percentage of it on advertising;
    find out how much competitors spend on advertising, and lay the same amount.

Evaluate the effect of the sale

By itself, the fact of the sale of stale goods and the release of warehouses is already a result. In addition, the effect of the sale may be to increase customer loyalty and expand the audience. Sometimes even a loss—making sale of illiquid goods benefits the business - for example, if you bought these goods with borrowed money and pay interest for them.

And to understand how effective the sale was in monetary terms, calculate three indicators: sales growth, gross income and economic effect.

Sales growth = revenue based on the results of the sale — the usual revenue before the sale.

Gross income = the cost of the goods on sale — the cost of the goods.

Economic effect (what we actually earned) = gross income — the cost of advertising and preparation of the sale.

In addition, I recommend analyzing which products brought the most profit and which advertising offers brought more buyers. This information will be useful to hold the next sale. You will already know which advertising is worth investing in and which products to focus on in it.
In short: how to sell a stale product

In order for the sale to bring benefits to the business, and not harm, I recommend planning everything in advance and analyzing the experience gained:

1. Select popular products — "locomotives". To sell things that are less in demand, use the products that are in the greatest demand.

2. Analyze competitors' offers. This way you can develop an advertising offer that others do not have.

3. Determine the discount amount. Calculate the cost of the product and its marginality — to make money on the product, the discount amount must be less than the marginality.

4. Think over the advertising campaign. Decide on the promotion channels and the advertising format, and then calculate the budget for the advertising campaign.

5. Evaluate the effect of the sale. Analyze how the sale affected the development of your business. And to understand the effectiveness of the sale in monetary terms, calculate three indicators: sales growth, gross income and economic effect.