Fashion Brand End-of-Season Clearance
Designing a profit-aware inventory liquidation strategy for a 3,500-SKU Shopify apparel catalog
To clear winter stock before a spring launch, mark down only the winter collection in stages, set a price floor from what unsold units are worth to a liquidator, and add an order-level spend tier and capped free shipping. Bulk Price Update shows a clean price without strikethrough; Flat Product Discount can show the old price crossed out.
At a glance
- Challenge
- Winter stock must sell before the spring collection arrives, without discounting spring items or selling below what a liquidator would pay.
- Approach
- Staged Flat Product Discount markdowns (or Bulk Price Update for clean prices) with exclusions and a price floor, an order-level spend tier, and capped free shipping.
- Discount Prime campaign types used
- Flat Product DiscountBulk Price UpdateTiered Spend DiscountFree Shipping
Scenario-based case study: the merchant is fictional and modeled on patterns across Discount Prime stores. Prices, costs and outcome figures are illustrative assumptions for teaching, not measured results from a real store.
Short Answer
To clear winter stock before a spring launch, discount only the winter collection, step the markdown down in stages rather than starting at the deepest price, and set a price floor from what the stock is worth to you if it does not sell (for example, what a liquidator would pay). Spring arrivals stay at full price by exclusion, not by hope.
The display choice matters. Discount Prime's Bulk Price Update writes a clean new price and does not show the old price crossed out. If you want shoppers to see "$180, now $125", use a Flat Product Discount, which by default moves the current price into the compare-at field so themes that support it show a strikethrough. Neither is guaranteed to convert better; that is something to test.
Scenario and the Data You Need
A fictional mid-sized Shopify fashion brand (about 3,500 SKUs, direct to consumer) has winter jackets, knitwear, and boots left as the spring collection arrives. The aim is to turn winter stock into cash and free space without discounting spring items.
Illustrative assumptions for a winter jacket (replace with your own):
| Input | Value |
|---|---|
| Regular price | $180.00 |
| Unit cost (sunk: already paid) | $60.00 |
| Liquidator offer for unsold units | $25.00 per unit |
| Selling cost per online order (fees, pick and pack, average shipping you absorb) | $15.00 |
| Units on hand | Your count per style and size |
Because the cost is already paid, the clearance question is not "what margin do we keep?" but "does selling online at this price recover more cash than the liquidator?" At $25 liquidator value plus $15 selling cost, any online price above $40 recovers more cash per unit. That $40 is the floor for this example.
Alternatives Compared
| Approach | Fits when | Does not fit when | Customer sees |
|---|---|---|---|
| Native Shopify automatic discount on a collection | Simple single-level sale; discount shown in cart and checkout | You want the reduced price on product and collection pages without theme work | Usually full price on the product page, discount at cart and checkout |
| Native price edits (bulk editor or CSV), setting compare-at yourself | One-off, permanent markdowns, e.g. moving items to an outlet | You want automatic return to regular prices | What you set |
| Flat Product Discount (Discount Prime) | You want a visible "was / now" price | You do not want a strikethrough or reference price | New price, old price crossed out (default mode) |
| Bulk Price Update (Discount Prime) | A clean clearance price with no reference price | You expect a strikethrough | New price only, unless a compare-at already existed |
| Tiered Spend Discount (order level) | Adding items to reach a threshold is realistic | Most orders are a single item | Extra discount in cart above the threshold |
| Buy X Get Y / Free Gift | You also need to move accessories, and items are complementary | Accessories are your scarcer stock; the reward would run out first | Reward line in cart |
| Free Shipping threshold | Shipping is a known drop-off reason | Used as the only clearance lever | Progress bar, free delivery above threshold |
Buy X Get Y is not wrong for apparel in general: "buy a jacket, get a scarf" can work when scarves are plentiful and add appeal. Here it is not chosen because it does not lower the jacket's price, and the jackets are the problem.
Recommended Setup
| Campaign | Setting | Reason |
|---|---|---|
| Flat Product Discount, stage 1 | Winter collection, 20% off, display moves current price to compare-at; exclude spring, new arrivals, gift cards, capsule line | A visible markdown; exclusions keep spring at full price |
| Price floor | $44.45 on the jacket campaign (manual dollar floor) | The $40 liquidator break-even, with room for the 10% order discount below |
| Tiered Spend Discount (order level) | 10% off orders from $200 | Encourages a second winter item; set from your order-value distribution |
| Free Shipping | Threshold slightly above average order value, with a cap on the amount covered | Bounds the shipping subsidy |
If you prefer clean prices without a reference price, swap the Flat Product Discount for a Bulk Price Update with the same settings. Check before using either: if winter items already carry a compare-at price from an earlier sale, Bulk Price Update keeps it, and the strikethrough will show that old figure, not today's regular price. If you sell in regions with rules on former-price claims, check that your reference price complies.
Staged markdowns
| Stage | Jacket price | Gross profit vs $60 cost | Cash per unit after $15 selling cost |
|---|---|---|---|
| Regular | $180.00 | $120.00 | $165.00 |
| Stage 1: -20% | $144.00 | $84.00 | $129.00 |
| Stage 2: -35% | $117.00 | $57.00 | $102.00 |
| Stage 3: -50% | $90.00 | $30.00 | $75.00 |
| Floor | $40.00 | -$20.00 | $25.00 (equal to the liquidator offer) |
Move to the next stage when sell-through for the stage falls behind the plan you set for your clear-out date, not on a fixed calendar. Stop at the floor and liquidate the rest.
The price floor is a single dollar amount per campaign. For a collection with very different price points, split it into campaigns by price band so each band has a sensible floor.
How the Campaigns Behave Together
There is no campaign priority setting in Discount Prime. What actually happens:
- Flat Product Discount and Bulk Price Update change real prices. Every channel sees them. Ending the campaign writes back the prices stored at activation, overwriting edits you made meanwhile; uninstalling the app does not revert prices.
- A product can only be held by one price campaign at a time. A stage 2 campaign will not take products that stage 1 still holds. End stage 1 and start stage 2 at the same time; start and end checks run every couple of minutes, so expect a brief moment at the regular price. Test this on a few products first.
- The order-level spend discount applies in the cart. Depending on its combine setting, the $200 threshold and the 10% are measured before or after other discounts. With real price changes, the cart already contains the marked-down prices, so a $117 stage 2 jacket plus 10% off the order becomes $105.30, 41.5% below the regular $180. Include that in your floor check: at the $40 floor, the order discount brings the jacket to $36, below the liquidator break-even. Setting the floor at $44.45 ($40 ÷ 0.9) keeps it covered.
- Free shipping has no profit protection and only discounts the first delivery group of a split shipment.
Customer Experience and Cart Example
A shopper opens the winter clearance collection, sees reduced prices (with a strikethrough under Flat Product Discount), and a progress bar toward free shipping.
| Cart | Subtotal | Order discount | Shipping |
|---|---|---|---|
| One jacket at $144 | $144.00 | None (below $200) | Paid unless above the free shipping threshold |
| Jacket $144 + sweater $64 | $208.00 | 10% = $20.80 | Free if above threshold |
Pre-launch Tests
| Test input | Expected result |
|---|---|
| Winter jacket, stage 1 | $144 shown, $180 crossed out (Flat) or $144 only (Bulk Price Update) |
| Spring arrival | Regular price, no discount |
| Jacket in a price band with a floor above the stage price | Floor price |
| Cart at $199.99 and $200.00 | Order discount only at $200.00 |
| End stage 1 on a test product | Regular price restored |
Measurement and Next Decision
- Primary metric: sell-through rate of winter units per stage against the plan for your clear-out date.
- Guardrails: cash recovered per unit compared with the liquidator offer, and the share of spring items sold at full price (a sign the clearance is not pulling spring buyers into waiting for markdowns).
- Confounders: weather, traffic channels, and the spring launch itself all move sales; compare with the same weeks last year with care, and do not treat a before/after change as caused by the discount alone.
- Next decision: move to the next stage when sell-through lags plan; stop at the floor; use what sold at each stage to adjust next season's buying depth.
Frequently asked questions
Should I run a storewide sale to clear out old season inventory?
Usually not, when the goal is clearing one season. A storewide sale also discounts spring arrivals and evergreen products that would sell at full price. Target the winter collection and exclude new arrivals, gift cards, and premium lines. A storewide event can still fit when most of the catalog is aging stock or the goal is a broad traffic event rather than clearance.
How deep should clearance markdowns go?
Set the floor from what unsold stock is worth to you, not from the original margin, because the cost is already paid. If a liquidator pays $25 a unit and selling online costs $15 an order, any online price above $40 recovers more cash. Step down in stages, for example 20%, 35%, then 50%, moving on when sell-through lags your plan, and stop at the floor.
Does Bulk Price Update show the original price crossed out?
No. Bulk Price Update writes a new price and does not copy the old one into compare-at, so a $180 jacket repriced to $125 shows $125 only, unless the variant already had a compare-at price. For a visible "was / now" price, a Flat Product Discount by default moves the current price into compare-at. Which display sells better is something to test, not assume.
Is Buy X Get Y a good fit for clearing winter apparel?
Only as a supporting offer. Buy a jacket, get a scarf can help when scarves are plentiful and complementary, but it does not lower the jacket's price, and if accessories are your scarcer stock they run out first. For the main problem, reducing the price of the items you must clear is more direct.
How do overlapping clearance campaigns interact in Discount Prime?
There is no priority setting. A product can be held by only one price campaign, so a deeper stage 2 markdown will not take products stage 1 still holds: end stage 1 and start stage 2 together. An order-level spend discount then applies to the already reduced prices, so check that the combined price stays above your floor.
Go deeper
Run this architecture in your store
Every campaign type in this case study is included in Discount Prime, with profit analytics to verify the margin impact.