Debunking Misconceptions About Off-Price

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By Ed Bernard

Throughout my years working in the off-price market, I’ve encountered countless buyers who have misconceptions or false presumptions about the off-price sector and the products represented within it. Oftentimes, buyers who have never attended OFFPRICE make assumptions about the quality and/or origin of the products. However, after visiting OFFPRICE and getting to know our vendors, they quickly realize that the off-price market is complex and can provide unique opportunities to increase profits for any type of retailer. In this article, I’ve debunked some of the most frequently asked questions that new off-price buyers have:

How has the OFFPRICE show changed over the years?

As our show has ‘evolved,’ we have gone from a jobbers only show focused on selling stock lot, to a combination of jobbers and engineered off-price product. Stock lots were usually brought directly from the manufacture or brand, re-sorted in the jobbers warehouse and then sold to a retailer. The newer category of engineered product is made to be sold advantageously by either off-price, discount, or regular priced stores that want to bring in some different price points to augment their regular priced inventory when they have mark downs or promotions.

What are close outs?

This is a very complex question and one that I have been answering for many years. Close outs can occur from many different things. Cancelations on perfectly good product due to late shipments is the most common. Regular retail stores have a very close timing schedule as to when they are able to receive product based on their open to buy dollars. If vendors do not deliver on time, they may get canceled orders from their customers during the season. That product is offered at a discount to other retailers or jobbers who may buy the entire shipment for a low cost and resell that product to retailers in smaller quantities. Additionally, issues with product color, end of season product, and orders canceled because of credit can be other reasons why product is offered into the secondary market.

Is off-price exclusively overseas product?

Approximately 97 percent of all the apparel inventory sold in the US is made in another country. This percentage is the same for regular priced product as well as off-price. When I started in business, the reverse was true and approximately 95 percent of all product sold in the US was made in America.

Is off price lesser quality product?

Engineered off-price products are often made in the same factories that the big brands make their product in, but the maker puts their own label on the item, which makes it ‘non branded.’ Despite the label change, the quality can be identical. From a stock lot perspective, sometimes producers try to sell product at a cheaper price to get rid of manufacturing problems, but truly good stock lot purchases from our veteran vendors will cull those issues and only offer quality groups to our retailers. However, Buyers should always have a keen eye to tell if the product might be deficient in sizing, color assortment, stitching, or have a potential crocking problem.

Is off-price product just for off-price and discount distribution?

Absolutely not! Many regular retail stores, online operations, resort boutiques, truck stops, convenience stores and more use off-price apparel and footwear to make longer margins and prop up sale promotions during the year.

Will having discounted price points hurt my stores reputation?

Savvy off-price buyers know that this is one of the biggest myths of them all! Making extra margin on that same product while not showcasing any promotions is a real benefit to profitability. Many stores that use off-price inventory to augment their normal offerings utilize creative merchandising strategies when deciding how to present their new found product to their regular shoppers. Offering incentive pricing like BOGOs or discounts to create that positive vibe with their customer base is something that they can sprinkle in as they see fit.