What many don't know is that the "sweet spot" depends on initiative, so to speak. It's the market rate at which, offered and open, an acceptable number of people will answer "yes" and make the buy. The sweet spot for a seller who is at leisure to wait is higher; they are content to get their price from the 5th or 10th or whatever buyer, who perhaps seizes upon convenience or needs the item faster or what have you. Or else the seller is willing to let the two or three people underneath him on eBay sell their copies first, and then if no more of the item are posted for sale, he will be the lowest available price without having to make less than he wanted for the sale. So clearly the seller who is operationally at leisure to defer the sale until later has the advantage. The sweet spot for a seller who needs the item gone faster is lower. The sweet spot for a seller who is going out of business and needs everything gone is low indeed, it's however low it takes to induce even an unwilling buyer to act.
In the case of durable goods, prices won't move much no matter what else is going on. That Trane 4-ton HVAC system is going to cost you seven grand pretty much no matter what you do. They don't need to sell it for less, because anyone who needs one is going to be motivated to shop on factors other than price, such as availability, reliability, and longevity. If you need a cheaper air conditioner, there are off brands that Trane doesn't bother competing with. The market for decent air conditioners is incredibly robust, it's an appliance people depend on and use heavily every day. For these and other reasons, that price is basically firm.
In the case of indulgent luxury goods like, you know, tabletop games and collectibles, especially on the "ornaments" side of the business like artwork, statues, shelf decor, and so on, a seller trying to clear merch quickly often has to reduce the price a lot. (And don't let yourself be led on that collectibles are robust investments. They're not. They're entertainment, and if you get anything out of them other than that, it's frosting on the cake, not a certainty, no matter what the clickbait tells you.)
This high degree of price volatility as a coefficient of turn rate is something that yours truly, an economic layperson, is dubbing "Push Decay." I'm sure there's some real term for it that explains just how severe it gets the less of a staple good you're pushing. But when you learn this concept as "push decay," it paints the exact picture of what happens to the goods when you do that thing.
The harder you have to push that merch out the door, the greater its value decays.
Now, the more staple or demanded a good is, the less push decay you'll observe. This can even happen for indulgence goods. The reason behind that, of course, is that once your price creeps down sufficiently far below the sweet spot, other dealers will buy you out. Price memory can be a sticky thing and sellers don't want people thinking of good resilient brands as being low-value, so they'll buy your 15% off iPhone and flip it on a narrow margin at 95%, rather than reducing the price of all their own stock to match the new floor you've de facto proposed, whether you meant to or not.
Conversely, take an item that's almost pure fluff, especially one whose fifteen minutes are over, and especially one that's strictly ornamental... and look out below. For example, I am overstocked at the moment on BoJack Horseman Funko POP figures. BoJack is an excellent show, but it has already passed its mainstream popularity peak, and Funko's extremely odd knick-knack figures of the characters from that show appeal to a very narrow (and now diminishing) audience. At full price, I get an occasional sale of BoJack himself, but no other characters. At 20% to 25% off, there might be no change in movement. At buy-one-get-one-free, they'll probably run out in an orderly fashion. If I knock them down 75% and actually get the word out about it, they'll be gone in an hour. Another dealer will come buy me out even if no collectors do. A dealer whose branding is "we have ALL the POPs" will get a different benefit out of having those BoJack figures on the shelves, whereas DSG features POPs purely as a pop-culture garnish and not a central part of our product mix. That dealer's bread and butter is POP figures and he won't want me getting people used to the idea that POPs ought to be 75% off, ever.
So it stands to reason that I don't really want to hold sales in general, which is consistent with advice I have been giving here in the past. And in the event that I do put merchandise on sale, I want to figure out the point at which the sale will consummate reasonably quickly, but I won't lose too much value to push decay.
Over the weekend (and continuing until I feel like ending it), we ran a Spring Cleaning sale of a handful of things we just wanted off the shelves and turned back into money:
Apparel, which we're throwing in the towel on for now -- everyone says they'll shop quirky nerd t-shirts, but clothing is available very cheaply from a litany of other sources and unless we make a deep foray into it, we won't be competitive. (And perhaps not even then.)
Funko POPs, as described above... sometimes it's just time to churn that stuff through.
We had a crate full of surplus playmats from various sources and it was time to convert those.
Finally, we got wind that a full-line restock of X-Wing was coming our way this summer, and that timing worked for some of our internal inventory-building goals, so we took this opportunity to empty the fridge and deep-clean the interior in anticipation of that.
The discount levels I offered in the sale reflected the amount of push decay we were willing to tolerate for each product subset. For the shirts and playmats, not too worried -- deep discounts, come what may. The Funko POPs went to half off, which is enough to move them with a bit of speed but won't ruin the punchbowl. And X-Wing is 20% off, which we wouldn't have changed even if the MAP restriction had allowed it; we don't want to push the stuff into a lake, we just wanted to ensure it would attrit away in time for the reload wave. Low discount, minimal push decay.
A final note on the concept of push decay is that a hobby game or comic store that is closing involuntarily or unexpectedly is in such a bad position in terms of being able to wait to get its price that the expectation should be well below wholesale prices on all the remaindered merch. Anything with robust market value will sell for at least that much, but the back catalog is going to be in a deeply devalued state until a dispositive outcome occurs.
I've been approached by closing stores asking if I want mid-list merch for wholesale and it's like, buddy, sorry to have to tell you this, but if I wanted the mid-list stuff at wholesale, I'd just order it from a distributor. Half the time there's one distributor or another offering that stuff on incentive, too. And the purchase would help us maintain or increase our distribution volume tier.
When Critical Threat Comics closed and we were unable to acquire it outright last spring, the closing auction was a bloodbath on everything store-centric, but they got pretty decent money on the merch because ordinary members of the public were invited and they didn't have wholesale access otherwise. Inviting the public seems like a great way to go about a liquidation auction, except that the store is way better off having a closing sale and getting those "better" prices sooner. At that point the goal is merely to slow the push decay. There is no stopping it, because the business body is already dead.
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