How to Discount Inventory Without Devaluing Your Brand
Habitual Discounting Might Be Killing Your Business—Here’s Why
Discounting is a common strategy that businesses use to drive sales, clear slow-moving inventory, or cater to budget-conscious customers. However, frequent price cuts can have unintended consequences: they may chip away at your brand’s image, train customers to avoid full-price purchases, and shrink your profit margins. If your business has become dependent on discounts, you could be doing more harm than good.
So, what are the alternatives?
The Downside of Constant Discounting
While discounting might seem like a quick fix for sluggish inventory turnover, the long-term consequences can be damaging:
Brand Devaluation – Frequent discounts can make your brand seem less premium. Shoppers may perceive your products as low-quality or not worth paying full price for.
Conditioned Buyer Behavior – Customers who become accustomed to regular sales will stop purchasing at full price, knowing that another sale is just around the corner.
Shrinking Margins– Even the small discounts add up. The more you discount, the harder it becomes to reinvest in growth or product improvements.
Less Customer Loyalty – Discount-driven customers often shop based on price alone, making them more likely to jump ship when a competitor offers a better deal.
Inventory Devaluation – Markdowns can make older stock appear undesirable, making it harder to sell products without further discounts.
Given these risks, how can you move excess inventory while maintaining the value of your brand?
Smarter Inventory Liquidation Strategies
Instead of relying on endless markdowns, consider these strategic inventory-clearing methods:
- Bundle Products Strategically
Instead of slashing prices on individual items, bundle slow-moving products with popular items at a slight discount. This can increase the perceived value while moving more inventory.
Example: A skincare brand struggling to sell last season’s facial serum could bundle it with a best-selling moisturizer at a 10% discount—less than the 30% markdown they might have considered for the serum alone.
Why It Works: Customers feel like they’re getting more for their money, and the perceived product value remains high.
- Private VIP Sales
Instead of announcing markdowns to everyone, reserve discounts for select groups like customers in your loyalty program or email subscribers. Unlike public sales, this approach rewards loyalty without diminishing the perceived value of your brand.
Example: A footwear brand could send a private “thank you” discount code to VIP customers for early access to new arrivals, paired with an exclusive deal on last season’s stock.
Why It Works: It rewards loyalty without broadcasting a price drop to the mass market and reinforces the idea that full-price customers are getting something special.
- Gift with Purchase (GWP) Offers
Rather than discounting a slow-selling product, offer it as a free gift with a minimum purchase amount. This increases average order value (AOV) and helps clear excess inventory.
Example: A cosmetics brand could include a slow-selling lipstick shade with orders when customers spend $50 or more.
Why It Works: Customers are more likely to spend more to qualify for the freebie, and the perceived value of your primary products stays intact.
- Reposition Products
Instead of marking down prices, increase the perceived value with new positioning or packaging.
Example: A furniture retailer struggling to sell office chairs could rebrand them as “ergonomic gaming chairs” and include a posture improvement guide to justify the pricing.
Why It Works: Customers are more willing to focus on and pay for the added value.
Relying too heavily on discounting makes it more difficult to sell at full price in the future. By focusing on promotions that provide value, you can build credibility without having to resort to markdowns.