What is off-price?
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by Stephen Krogulski
If you thought you were the only one wondering what off-price means, don’t worry you’re not alone. In fact, many buyers and sellers who think they know what off-price means actually have a misconception about this growing area in retail. Here are the facts…
What is off-price?
Off-price reflects the sector in the retail industry where wholesale sellers aggressively negotiate for excess product from importers and manufacturers (branded and non-branded). These sellers may have excess goods for a variety of reasons, including: late cancellation of shipments, online returns that can’t be re-shelved, overstocked orders, and more. Regardless of the reason, off-price vendors give retailers room to capitalize on these opportunity buys for immediate or future deliveries to the trade.
Many off-price retailers offer products originally intended for regular-priced department stores, but at a reduced price which will vary depending on the offering. Well-known brands are the easiest for consumers to compare, as they often have MSRP tickets attached to the garment. If not, the everyday price found in most stores is easy to find, or already known. Wholesalers sell to off-price retailers with the retail pricing already in mind so the store owner or buyer can still make a reasonable profit.
Wholesalers often buy product directly from the brand or factory that makes product for the brand, with proper release. Sometimes, when the merchandise is bought from the factory and no release is available, the wholesaler will change the label. Manufacturers, on the other hand, create “engineered off-price” products, which are produced in factories to meet a target price point in the current styles and trends reflected in the season.
What completes the off-price cycle is when a retailer identifies these opportunity buys from the wholesale seller, and resells the merchandise for a profit. The profit margin is, in-part, derived from the acquisition costs of the goods, which are much lower in the off-price channel, and in-line to what today’s educated consumers are willing to pay. We refer to this buying pattern as the treasure hunt mentality.
What is the OFFPRICE Show?
The OFFPRICE Show just celebrated the 51st edition of our trade show in Las Vegas. It is a community of 450+ vendors showcasing at-once or in-season opportunities in all apparel, accessories, and footwear categories. But we’re more than just an event, we’re a platform connecting buyers and sellers in the value retail marketplace. Our trade show, market events, and online platform, OFFPRICE365.com, offer the greatest treasure hunt in retail.
OFFPRICE enables retailers of all sizes, from over 80 countries, the ability to source the right product, at the right price, with a wear-now customer mentality in mind. The scarcity of the product is an asset for buyers looking for immediate goods, and limited inventory gives the retailers the opportunity to practice the true art of the deal. The key to the treasure hunt is the product has to be the right quality and the right price to create value.
If you’re interested in an OFFPRICE exhibitors’ products, but want to know how they acquire their merchandise, just ask!
How do I find the right exhibitor?
Connect @ OFFPRICE is a match making program where our team assists in the process of making sure retailers meet with the right vendors. We make personalized suggestions for new vendors based on your company’s style, categories, buying power, and more, not only during our events, but year-round. This program solves retailers’ needs for a healthy product mix, sourcing quick fill-ins, and it can uncover unknown opportunities – once again the treasure hunt plays out.
Now that you’re in-the-know on all-things off-price, join us for our next Las Vegas OFFPRICE Show, August 15-18, 2020, at the Sands Convention Center. Registration will open soon. In the meantime, visit www.offprice365.com to view our exhibitors’ products 365 days a year.