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Merchandising for Profit (Discount Stores)

Liquidation products can be more challenging to display for resale than brand new, factory packaged or imported goods, but they can also be highly desirable for your retail customers and very profitable for you. Merchandising your liquidation products in an effective way can make the difference between a wildly successful discount store or one that struggles to turn a profit.

John Foto of Santa Fe Seconds, a trio of wildly successful discount stores launched in 2000, helps to illustrate some key techniques that can help make a liquidation retail operation successful. Implement the following tips and set up your store for success!

Display What You Have

Many liquidation retailers express frustration at having to purchase mixed lots of assorted items (like footwear for instance), because of the challenge of displaying them. Liquidation discount stores are a bit different from regular retail stores in that they don’t require you to have a full size run of every style of shoe (or other item). It is perfectly okay to display everything you have on a wall, either organized by size or not organized at all. Customers can be free to look around and select what they want with this type of “what you see is what we have” display.

Put Seasonal Items Front & Center

If your store is open year-round, you should be catering to your retail buyers during each shopping season. Holidays are always a time of increased shopping, whether people are buying gifts for friends & family, shopping for groceries or redecorating their home for the season. It is therefore very important to always source a percentage of seasonal products and to display those products prominently. Santa Fe Seconds features a big section of seasonal products right when buyers walk into the store – it’s virtually impossible to miss. This immediately brings the buyer into the seasonal mindset and buying spirit so they can spend not only on the seasonal items they’ve just seen, but on all of your other attractive offers.

Never Underestimate Impulse Items

Impulse items (or small, every-day use items placed near or at a checkout counter) are applicable to every type of retail operation, both in person and online. Make sure you always have a selection of impulse items at your checkout counter to engage customers as they wait in line to pay for their purchases. Impulse items can consist of food or snacks, beverages, small items like jewelry, baby accessories, nail polish or cosmetics, chapsticks, batteries or other small, daily-use items. Add impulse items to your checkout locations and watch your average invoice amount increase instantly!

No Refunds – Store Credit Only

When dealing with liquidation items, if customers aren’t completely familiar with the nature of the goods or the fact that they may have damaged packaging, cosmetic blemishes or be otherwise imperfect, your requests for returns might be slightly higher than usual. However, it is absolutely acceptable to make your customers aware that you will not refund any purchases and that items are sold as-is. In order to provide better service and ensure customer satisfaction, you can choose to offer store credit in place of refunds. This allows you to keep your customers happy without making too big a dent in your bottom line. Whatever your store policy becomes, make sure you have prominent signs up around your checkout counters so shoppers are aware.

Missing Items? No Problem!

It is a common misconception that you can’t sell items that are missing parts or otherwise imperfect in a retail store. Santa Fe Seconds used this clever method of informing customers of units that may be missing inside dinnerware set boxes: on the picture of each item, they made a note of how many units of each were missing from the box. It is then extremely clear to the customer what they’re going to get, and they can make an educated and informed purchasing decision instead of simply being told an item is “as-is” without knowing what might be wrong with it. This Mikasa item originally sold for over $140 retail and was available at Santa Fe Seconds for only $55 to make up for the missing units. The store marked it up for a handsome profit and the end user will be getting it for over 60% off its original price!

No Box? No Problem!

Often times, liquidation products will come without an original retail box or with a box that is in very poor condition. This shouldn’t affect the potential profits an item can generate! If a dinnerware set (or any other item) is missing its original packaging, you can shrink-wrap the items to keep them together and protect them from scratches and still sell them as a complete set! At the end of the day, your customer isn’t buying a retail box – he’s looking for a good deal. If the price is right, the box doesn’t matter!

Deals Deals Deals!

Ideally, your liquidation discount store would be full of amazing deals for your customers based on the fact that you’re obtaining the goods at a discount – those savings should be passed on to your customers. But that doesn’t mean that you can’t give them even better deals! Two-fer deals are always a great way to move more inventory while offering a volume discount to your customer. Santa Fe Seconds has clean, professional signage next to merchandise offering “2 for x” and “3 for x” deals. Don’t be afraid to get creative here! Buy one get one, Buy 4 get 1/2 off 2 items, etc.

Highlight Clearance Items

Clearance items are typically items you need to get out of your store as soon as possible to make room for new stock. Many retail stores place their clearance section somewhere in the back to the store so it doesn’t detract from the rest of their more profitable inventory. Santa Fe Seconds takes the complete opposite route, and it works! They place their clearance items front and center in by the front door of the store so that every customer who walks in or out has to look at it. This guarantees much higher exposure for those items and increase the likelihood that they’ll be sold faster.

Fancy Displays Not Required!

While there certainly is great value in displaying items attractively and investing in some professional store display units for certain types of items, other items can be displayed just the way you bought them. If you purchase wholesale merchandise from a liquidator that is delivered in large watermelon bins, those bins can make great rummage bins for cheaper items, impulse buys or anything of lower value that customers might enjoy digging through. Santa Fe Seconds astutely puts two bins of seasonal and deeply discounted items out front to attract bargain shoppers without having to purchase expensive display units.

Use Shopping Carts

If the square footage of your store permits, consider getting shopping carts for your customers to use. The more they are physically able to carry (or wheel) around the store with them, the higher the likelihood that they’ll buy multiple items. If shopping carts aren’t an option, shopping baskets can also be helpful but the bottom line is, equip yourself for the sales you’d like to make.

Toot Your Horn!

Or in other words, invest in a big, clear sign to define the entrance of your store. Many discount stores make do with a vinyl banner that eventually succumbs to weather and dirt and ends up hanging unattractively from one screw. Investing in a proper sign to highlight your store can make the difference in your bottom line. An attractive sign can bring in buyers who are just passing by (great return on investment!) and creates brand recognition in your neighborhood.

Recycle Displays!

Just like you can use shipping & warehousing bins to create a rummage sale in front of your store, you can also recycle other types of display units to highlight certain product categories. In this image, Santa Fe Seconds used standard grid wall units (typically used to display clothing on hanging waterfalls) to display sunglasses. Cheap, effective, easy and best of all – reusable for other merchandise down the line! As long as items are displayed clearly and marked with price tags, the exact display solution you use is unimportant.


Your store setup should ideally show your new arrivals and your highlighted items in its merchandising, but many times you’ll receive too many new items to highlight physically in the space. It’s a great idea to use peg boards or digital TV displays to communicate your latest arrivals, the original retail price of the item and the great low price at which your customers can buy it. Doing this regularly can make it very easy for frequent shoppers to see what’s new and get right down to buying!

Santa Fe Seconds has three locations in Pomona, Wilmington and South Gate, California. The South Gate location can be visited at 8730 Santa Fe Ave, South Gate CA 90280. You can also visit them at www.santafeseconds.com

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