Inventory glossary
What is Clearance inventory?
Clearance inventory is stock a store prices below normal margin to sell off quickly, usually because it is slow-moving, seasonal, or being discontinued.
Clearance inventory ties up cash and shelf space without producing full margin. Small Shopify stores need to spot it early because the longer stock sits, the deeper the discount usually has to be to move it.
Use clearance pricing on variants that are not selling at forecast and are unlikely to recover. Review which SKUs are candidates before placing new purchase orders, so you do not reorder stock you should actually be clearing out.
Example
A candle store has 80 units of a holiday scent left in March. Normal price is 18 dollars with a cost of 7 dollars. To clear the stock before next season, the store marks it down to 10 dollars. Selling all 80 units brings in 800 dollars and still covers cost, even though margin per unit drops from 11 dollars to 3 dollars.
Common mistakes
- Waiting too long to mark stock down, which forces even deeper discounts later.
- Reordering a SKU out of habit while older units of it are still sitting in clearance.
- Treating clearance as a one-time cleanup instead of a regular check after each season.
Clearance inventory and SteadyShelf
SteadyShelf's forecasts flag SKUs with falling demand before they pile up, so you can decide to clear them instead of placing another order.
SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.
Related terms
Slow-moving inventory · Dead stock · Markdown · Excess inventory · Obsolete inventory
FAQ
How is clearance inventory different from dead stock?
Clearance inventory is stock you are actively discounting to sell now. Dead stock is inventory that has stopped selling and likely will not sell even at a discount.
When should a store move a SKU to clearance?
When sales have slowed well below forecast and the stock is seasonal, discontinued, or aging, and holding it longer costs more than discounting it now.
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