How To Make More Money From Your Clothing Store

Clothing stores are not typically businesses that see high profit margins. In fact, Forbes says that the profit margins of most clothing stores fall somewhere between 4% and 13%, with profit margins of less than 8% occurring most often. Many clothing store owners are now resorting to using quite a few tactics to increase their overall profits. Whereas some of these are are relatively new, the majority of them have been used by management and sales associates for decades to boost sales. Here are ten strategies for increasing profits that are either the most successful methods, or both eye-opening and very interesting…

To make more money from your clothing store:

Have sales associates recommend more expensive and additional items to customers.
Arrange stock in specific patterns to keep customers in the store longer.
Place the most expensive items in the front of the store.
Keep a limited number of items on the floor to create a sense of urgency.
Intentionally place strategic items in aisles to slow down shoppers.
Use sales signs with terms like “from,” “up to,” or “select styles” in the small print.
Group items together and display in sets to sell more than one piece.
Exaggerate the popularity of brands or items with high profit margins.
Have clearance and sale items placed in the back of the store.
Have employees taught to be vague about upcoming sales.

Some of the methods that are included in this article are amongst the most popular tactics that clothing store owners have used for years, while others are relatively new. I will break down each of the ten methods to better understand why they have been used for as long as they have. We will also take a closer look at a few of the newer techniques that sales associates and managers are currently discovering to increase their bottom line. Let’s see what methods are working to improve the profits of clothing shops around the world, as well as figure out why they work so well, shall we?

Table of Contents

Encourage Upselling and Cross-Selling

Of all the methods currently being used, this is definitely the most tried and true technique for clothing stores across the globe. Upselling and cross-selling have both been around for as long as retail stores have been in business, and are taught in practically every sales-related training session and new-hire orientation because store owners believe in these techniques so adamantly. So, how do you upsell or cross-sell a customer? Upselling is when the salesperson talks the customer into purchasing additional features, or a more expensive version of what they originally wanted. Cross-selling occurs when salespeople talk the customer into making additional purchases along with the original item.

Use Specific Patterns To Increase Shopping Times

I’m sure that I am not the only person who has gone into a store for one or two items and walked out with a shopping cart full of additional (and often unnecessary) purchases. Trust me when say that this does not happen by accident. Stores are meticulously designed to keep you shopping as long as possible. After all, the longer you spend in a store, the more money you will spend. Clothing stores are arranged in patterns specifically designed to keep the customers looking and shopping. Getting people in the door is only the first step. Your clothing store needs to be attractive to your customers, complete with displays and other visuals designed to draw attention to the merchandise and make it more enticing. The more appealing you make your store, the more people will want to buy their clothing from you.

Keep the Most Popular and Expensive Items In the Front of the Store

Yet another way to increase sales and profits in your store is to encourage your customers to purchase more expensive items, which generally have a higher profit margin than sale items. You are probably wondering how you can accomplish this when most of the people who are come into your business are fairly cost-conscious. Perhaps the most effective way to get your customers to spend more is by placing the more expensive clothing at the front of your store. Putting the most expensive merchandise in the front is also a good way to reduce theft. Another way that you can use this method to your advantage is by putting your top-selling and most popular merchandise right in the front of your store where it is easy to find. You’ll be surprised at how much this increases sales and profits.

Keep Fewer Items on the Floor To Create a Sense of Urgency

As an owner of a clothing store, your profit is dictated by the sales made at your shop. One of the most important aspects of being a profitable business is getting customer to buy now rather than later. Chances are that if they leave your store without making a purchase, they will either buy the item elsewhere, or they won’t buy it at all. Sometimes customers may need to be nudged a little when it comes to deciding to take the plunge and splurging on that outfit they have their eye on. The easiest way to get customers to give in and make the purchase is by creating a sense of urgency. You can do this by stocking fewer pieces on your sales floor. If they don’t buy it now, you may not have it later. You would be able shocked by the number of customers who have don’t want to take that risk.

Place Displays In Position To Slow Down Customers

Do you remember earlier when I mentioned that you can get customers to spend more time in your store through strategic planning and clever layouts? Better yet, per CNBC, did you know that the average consumer spends a approximately $5,400 per year on impulse purchases? Placing items in the middle of your aisles is one of the best ways to slow people down and get them to spend more time and money in your store. Whether you achieve this buy putting a small display in the middle of an aisle, or if you place a few racks in otherwise empty spaces to intentionally make people take a longer route through your store, the ultimate goal is to slow down your customers and get their attention so they make purchases they would not have made otherwise.

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Use Specific Verbage and Small Print On Sales Signs

Let’s stop thinking like owners for just a few minutes and think like our customers. The majority of them work hard for their money, and they want to get the most for their dollar. I’m sure that most of you can relate, right? When you are out shopping for clothes, what is the one thing that is more likely than anything else to attract your attention? If you are anything like me, the answer to that question is a big sign advertising a sale. Most of your customers will have the same thought process. However, you will not see a high profit margin by selling clothes at a reduced price. This is why you use the sign to draw people in, but make sure to use specific verbage such as “from,” “up to,” or “select styles.” It is also imperative that you remember to use small print when using these terms for your signs. Most of all, always remember to keep your signs honest. Don’t advertise false scales just to make draw people into your store.

Group Or Display Items Together To Create Sets

Yet another method for increasing profit margins that has stood the test of time is grouping or displaying items together to create a set. This is a trick that is utilized by practically every department store across the United States. Although many of your customers may be drawn to a single piece, they can become instantly enamored when they see a few pieces put together to create an entirely new outfit. Besides, when people see a complete outfit, they believe that they are getting a much better deal than if they bought the items individually. Not only will your customers be more attached to the outfit when they envision their selves wearing it, but they will also spend a significantly larger amount of money by purchasing more pieces. As an additional tip, I would recommend grouping items with higher profits together when creating an outfit.

Exaggerate How Popular High-Profit Brands Are

While this may not initially seem like a good comparison, I want you to think about the last time you went car shopping. While you were walking around the lot and trying to reach a decision on which car to purchase, a salesman probably greeted you and asked if they could help you with anything. While you probably knew which model you wanted to buy, their job is to convince you to buy the model they need to sell the most. How did they accomplish this? They probably played on your sense of belonging and fitting in by trying to convince you to purchase the model that they claimed was the most popular. No doubt, they probably sold many cars by employing this tactic. You can do the same with your clothing store by exaggerating the popularity of high profit brands to increase your overall profits.

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Clearance and Sale Items Belong In the Back

Earlier in this article, I mentioned that there was little profit to be made by selling items that were on sale or on clearance. However, selling items that have been marked down is better than taking a total loss on inventory that you cannot move. One of the most popular strategies for getting customers to purchase these items is by placing clearance bins and sale items next to fitting rooms. This can create more opportunities for impulse purchases, and is also a chance to recoup some of the costs you would otherwise lose if the merchandise did not sell at all. I know what most of you are thinking. You are risking having the customer put back a more expensive item to purchase a clearance item or a sale item. That’s usually not the case, and will often result in a customer making more purchases than they had originally intended.

Employee’s Should Be Vague About Upcoming Sales

There are plenty of times when I have gone into a store to make a purchase, only to be discouraged by the price of the item. So, what is the first thing that you usually do in that situation? The first thing that I would do is ask a salesperson if the item will be going on sale anytime soon. Normally, in that situation you get a vague reply from a store associate that doesn’t answer your question at all. The reason for this is that store owners and managers train their sales people to be intentionally vague when answering questions regarding when an item will be going on sale. The goal is to get you to purchase the item now, rather than later. If they can get you to buy it at full retail price, that means that the store has made a much higher profit on the item and doesn’t risk losing a sale by letting the customers know that they can get a better price on the item later.

Conclusion

Although most clothing stores are well aware of what kind of revenue, they must take in to keep the lights on and the doors open, several are not aware of a few tricks that they can employ to increase the profit margin for their business. One of the oldest tricks in the book is to teach your sales associates the art of upselling and cross-selling. Many owners also arrange their shops in specific, well thought out patterns to increase the amount of time their customers are in their stores. Keeping the most expensive and popular items at the front of the store is the best way to ensure that customers purchase these items first. Another method for increasing profit that is often utilized is placing stock or displays in a manner that will intentionally slow your customers down a bit.

Sales signs should have specific verbiage on them that is usually small, and strategically placed. Plenty of managers and employees are taught to create sets and group items together to create outfits that generate more sales. Another trick that is gaining traction is to exaggerate how popular a high-profit brand is toxic promote sales. Clearance and sale items are also usually kept in the back of the store to guarantee encourage impulse purchases. Additionally, employees are generally required to be vague regarding any upcoming sales to encourage customers to buy now. You can combine these tactics with the things of have learned from being a business owner to maximize the profits of your store. These are tried and true methods that have been around for years. Now, it’s time to put them to work for you. What are you waiting for?

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