In this interview, retail inventory director Marina Ellis explains how chains decide when leftover stock must leave the warehouse — and why a planned sale is usually cheaper than waiting.
Marina Ellis
Inventory director at a national retail chain
— Stores talk about “healthy stock,” but warehouses still fill with leftovers. What is going on?
— Retail is a forecast business. Weather, trends, and late trucks create surplus even in good teams. The mistake is treating leftover pallets as a future opportunity. After a few weeks they are a cost: rent, handling, frozen cash, and a blocked inbound plan.
A sale is how we convert that cost into a decision. We do not wait until the aisle is impassable. Ageing reports trigger a markdown path: store sale, online leftover listing, outlet, then a lot sale.
Support tools sit around that path: loyalty previews, bundles, flash hours. Infrastructure is the other half: a sale bay, a DC ageing zone, a pick wave that can feed the event overnight. Together they are the operating system for leftover stock.
— How is a sale different from simply cutting the regular price?
— A regular price cut trains customers to wait and damages goods that still turn. A sale isolates leftovers. Full-price floors stay current. Bargain hunters go to a marked zone or a timed event.
The key feature is a shared path: warehouse to sale location to till to empty slot. Staff are not hunting cartons; they are replenishing a planned set of SKUs.
Management of the program matters as much as the discount. Someone owns the leftover list, the calendar, and the last exit. Otherwise every department hopes someone else will move the pallet.
— Which tools inside the warehouse actually help a sale?
— An ageing zone so leftover SKUs are not mixed with A-stock. Pre-ticketing. Photos for online. A weekend dock for bulky goods. Without those, a poster in the window is theatre.
Returns must not flow back into premium slots. Opened packs and tried-on fashion go to “like new” or staff sales. That single rule saves a surprising amount of space.
— Do sale programs match what the business actually needs?
— We still see warehouses above a comfortable occupancy, with almost no spare bays before peak inbound. At the same time, leftover SKUs sit for months. The mismatch is not a lack of discounts. It is a lack of a path.
The strategy is simple: every leftover unit gets a next stop. By the next peak we want empty cubic meters, not a bigger overflow contract.
— How do you know what leftover stock will actually sell?
— We talk to stores, look at turn, and test two markdown depths. Loyalty data shows who buys bargains. Marketplace listings show what the local shop cannot finish.
That demand picture is what we give buyers: which leftover types move at 30%, which need a lot sale. Honest data speeds the next decision.
— Category-specific sales are growing: food stickers, fashion outlets, electronics flash events. Is that a fad?
— It is a lasting split. Grocery dies on a date. Fashion dies on a season. Electronics die on a launch. One generic 50% weekend does not serve all three. Specialized paths empty warehouses faster because they match how the leftover actually decays.
Where leftover volume usually concentrates:
Start where cubic meters and expiry risk are worst. A sale that only discounts easy bestsellers will look busy and still leave the warehouse blocked.
— How many leftover units typically leave through a shop-floor sale?
— Often 70% if the zone is visible and the first cut is timely. The rest needs outlet, online, or a pallet buyer. Planning that remainder is what prevents a pile at year-end.
— How is the economics of a sale different from hoping stock will sell later?
— Hope has a rent bill. A sale has a discount bill. We compare them every week. When holding costs pass the markdown, we cut. Vendors who co-fund the cut make the math easier.
On the investment side, fixtures and overtime for a campaign are small next to overflow space. A subsidy from the brand owner for leftover lots is even better.
Clearance economics in brief:
Everyone can win: the store gets space and cash, the customer gets a fair bargain, the warehouse gets empty slots for inbound. That is the point of a sale as an inventory tool.
— What role does the shop floor play versus the DC?
— The DC finds and stages leftover stock. The store makes it buyable. Online extends the catchment. If any one of those is missing, surplus sticks. We treat them as one loop, not three departments with three lists.
A working sale loop in numbers:
Events help, but they are not the system. The system is the weekly leftover list and the next stop for every unit.
Two clearance formats that empty space fast
Yellow-sticker / short-dated
Near-expiry grocery and cosmetics get a visible, deepening discount near the till or in a dedicated bay. The aim is same-day or same-week exit so cold storage does not fill with hope.
Warehouse weekend / bulky lots
Furniture and large leftovers are sold from the DC or a sale mezzanine with delivery offers. One weekend can free more cubic meters than a month of shop-floor stickers.
— What is next for leftover stock in your chain?
— More online leftover catalogues fed from the warehouse, more vendor-funded markdowns, and a stricter stop date before write-off. We want inbound to meet empty slots, not a second overflow tent.
— Where are you in that build-out?
— The rules exist. The ageing zone exists. We are tightening pick waves and B2B lots so the last 10–30% does not sit until December. That last slice is what used to clog the building.
— Besides sales, what else helps stores unload surplus?
— Better buying, better size curves, and honest returns grading. Sales cannot fix a permanently wrong buy. They can stop that buy from occupying the warehouse until it is worthless.
Key tools that make a sale actually clear the warehouse
Ageing reports and a markdown calendar.
Leftover SKUs are flagged by turn and occupancy, then given a first cut, a second cut, and a last retail date. Without a calendar, discounts happen too late.
A visible sale zone plus online leftover listings.
Customers must be able to find bargains. Stores need a bay; the DC needs a catalogue. Mixed full-price and leftover on one table helps neither.
Loyalty previews and flash hours.
Members move the most attractive leftover sizes first. Short windows create urgency without permanently training the market to wait.
Outlet, marketplace, and B2B lots.
Shop-floor sales rarely finish 100%. The remainder needs a next stop or it returns to the same pallet position.
Vendor co-funding and take-backs.
Shared leftover cost starts the sale on time. A fight over margin is how warehouses stay full.
