In the hope of driving customer traffic and enticing the customer

to buy in this challenging economy, retailers both small and large

are offering non-stop discounts on much of their merchandise.

While discounting usually drives volume, it comes at a great cost:

store profits. Do too much of the wrong type of discounting, and

you'll find your store without enough money to buy more merchandise

and pay the bills (and yourself).

Use these tips to keep your retail store margins healthy in this era of

discounting:

1. Emphasize your more profitable merchandise through in-store

signage, featured displays, suggestive selling, advertising, and

marketing.

2. Feature merchandise that your customers cannot find elsewhere.

Exclusive products allow you to get higher margins even if discounted.

3. De-emphasize low margin merchandise or items your competition

is slashing prices on. While you may want to advertise a loss

leader to drive traffic, you do not want to give prime selling space

to these items. If inventory money is tight, cut back on the amount

of lower margin items you stock.

4. Clear out your slow moving merchandise by taking discounts on

these items monthly. Discounts on slow movers give your bargain

seeking customers the deals they are looking for and allow you

to turn this inventory into cash.

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