When to go into summer sale?

[hadoliden]

Hello, I run a fashion business. In January we have a sale to clear winter stock and fom February start selling summer stock - all very straightforward. No-one buys winter clothing after January because they don't have holidays coming up etc but they do buy summer stock because they have holidays and special occasions starting up form Easter onwards.

What has happened this season though is that all my competitors have already gone into sale in mid June. People do continue to buy summer clothes right up until the end of August for holidays etc but they don't even think about winter clothes until it gets colder in October. I would not like to display my winter clothes until September.

So if I go into sale now, does that mean I have to stay in sale for 2.5 months making a total of 3.5 months out of 12 in sale where there is a very small margin for making a profit? At the moment my sales have slumped dramatically because people are buying in the other shops where there is a sale.

I don't know what to do. Does anyone have any advice?

[Seb]

I have set a smoothie business over the last month and accumalated £120 profit;i only sale on a sunday due to my age but do u reckon i could be a Entrepenur

[crackah]

..... seb WTF?


Also, you are in a tricky situation.

I guess you could advertise more, what do you sell? is it your own design or other big brands? i guess you would need to match their prices to more stock.

If they are going on sale already, could you maintain your prices and stick with it, and then go on sale, and move all your remaining stock end of summer?

[jasaunders]

Well, I could write a 100 page book for you here on how you should evaluate your business strategy in dealing with this issue. Here are some things to consider:
What dimension is your business competing on? Are you only competing on price? If so, that is what your strategy is and you will have lower margins to deal with it, which must be compensated with larger sales volume. If price is not your differentiator, what is? Can you compete on speed, flexibility or quality? How is your business different then your competitors? Why should a customer buy from you and not from them?
What type of forecasting do you have in place? How will this seasonal trend change affect your inventory on hand? turns? payment terms with suppliers? cashflow?
If you were to go on sale, would your business be able to sustain itself at the lower margins? Do you think your competitors will be able to?

These are just some questions to consider, there are many more. But you really need to evaluate your business strategy and develop tactics to achieve those strategies.