08/18/2026
by Georganne Bender
Just because you fell in love with a product at Creativation by NAMTA doesn’t mean your customers will love it, too. And when it doesn’t sell, you need a plan to move it out so you can invest in merchandise that will. Here’s the thing: Don’t wait until customers start walking past a display without a second glance before deciding it’s time for a markdown. We’re talking art supplies, not fine wine. Merchandise doesn’t get better with time.
Know the age of your inventory
To manage inventory and maximize your return on investment (ROI), you need to know the age of every item on your sales floor and in your stockroom. When did it arrive? Running to your POS every time you need that information isn’t practical, so create a system that lets you see an item’s age at a glance. I like a simple bin ticket.
Bin tickets are labels attached to the back of each peg hook or adhered to shelves and fixtures to identify a product’s designated home. Include the information that’s important to you, such as SKU, vendor, price, minimum and maximum quantities, cost code and date code.
Create a cost code
Add a cost code to both the price tag and the bin ticket. You don’t want customers figuring it out, so use this easy-to-remember word strategy that disguises the numbers:
D I R T C H E A P X
1 2 3 4 5 6 7 8 9 0
If an item costs $19.95, its cost code becomes DPPC. When it’s time to take a markdown, you’ll instantly know how much margin you have to work with, no calculator or POS report required.
Use date codes
Date codes tell you exactly when merchandise arrived. A simple method is to reverse the date into year-month-day format. For example: 6202 717 = July 17, 2026.
Now you can immediately see which products are moving and which have overstayed their welcome.
Make out-of-stocks obvious with the Dot System
Nothing frustrates customers more than being led to an empty shelf. We created the Dot System to help you eliminate the guesswork. All you need are small adhesive dots in three colors:
- Green dot: More inventory is in the stockroom. Restock it immediately.
- Red dot: No backstock remains, but the item can be reordered.
- Black dot: No backstock remains, and the item should not be reordered.
It’s a simple visual system that helps every associate make the right decision without hunting someone down for answers.
Control your delivery dates
You don’t have to accept whatever delivery schedule your suppliers choose. Before placing an order, decide when you actually need the merchandise, then ask your supplier to deliver accordingly. Receiving seasonal goods too early ties up cash, while receiving them too late leaves you scrambling to sell them before the season ends. You won’t always get the dates you request, but if you don’t ask, the supplier always wins.
Know when to take a markdown
Many retailers think markdowns are the enemy. They’re not. Stores rarely go out of business because they took markdowns; they go out of business because merchandise doesn’t sell quickly enough to generate the cash flow needed to pay the bills.
Suppose an item priced at $25 has stopped selling. Mark it down to $19.99, and suddenly its perceived value increases. Wait too long, and you’ll need much steeper discounts to get anyone’s attention. Just ask any retailer still trying to sell Halloween costumes at full price in December.
Markdowns aren’t a sign of failure – they’re a tool that frees up cash so you can invest in fresh merchandise with higher margins and faster inventory turns. So, as you walk your sales floor each day, look at every display with fresh eyes. If merchandise is past its prime, mark it down and move it out.
Seasonal markdowns should begin before the season ends, not after. Customers looking for end-of-season bargains will simply buy elsewhere if your pricing isn’t competitive. And don’t fool yourself into thinking you’ll just pack it away until next year; merchandise never looks exciting the second time around. The goal is to turn stale inventory back into cash, then put that cash to work on something new.
Merchandise clearance like you mean it
Too many clearance sections look like disaster zones, and that’s no way to create value. Clearance merchandise deserves the same thoughtful presentation as full-price product.
During a clearance event, feature markdowns near the front of the store to generate excitement. Once the sale ends, relocate remaining merchandise to a clearly signed clearance area near the back of the store. Why the back? Because customers have to walk past displays of fresh, full-price merchandise to get there.
The goal is simple: Treat every item on your sales floor as if it’s a stack of cash because that’s what it is. No matter how much you loved buying it, if it isn’t selling, it has to go. Every slow-moving item is taking up space that could be occupied by merchandise your customers actually want to buy.
Georganne Bender is a nationally recognized speaker, author and consultant who helps organizations drive measurable growth through smarter, more engaging customer experiences. A five-time RETHINK Retail Top Retail Expert, RetailWire BrainTrust panelist, and 2026 NAMTA Hall of Fame inductee, Georganne helps shape the conversations driving the future of retail.
