Clearance Recovery Calculator
Plan your exit strategy for dead stock. Calculate the financial impact of different liquidation discounts.
Stock Details
Cash Recovery vs Cost
Liquidation Options
Inv Value (Cost): $20,000
Break-Even Price
You need to sell at $20.00 to recover your costs.
Best Option
The 'Standard Sale' scenario allows you to recover your capital.
Cash Release
Clearing this stock releases $20,000 of working capital back into your bank account.
Execution Steps
Enter Inventory Count and Unit Cost.
Enter Current Retail Price.
Set your 'Target Recovery Rate' (e.g. 100% means breaking even on cost).
Compare the scenarios to see which discount level meets your cash flow needs.
Pro Strategy
- If 30% off doesn't move it, don't wait. Go straight to 50% or 70%. Slow trickling discounts is the worst strategy (death by a thousand cuts).
- Bundle clearance items with high-margin best sellers to blend the margin.
- Consider selling to a liquidator (e.g. TJ Maxx) if the volume is huge. You get immediate cash and protect your brand image.
Core Concepts
Cost Recovery
The primary goal of clearance is usually to get your cash back (100% recovery), not to make a profit. Cash tied up in inventory is dead weight.
Opportunity Cost
Keeping old stock on shelves prevents you from displaying new, higher-margin product. It is often better to take a loss to free up the shelf.
Brand Damage
Excessive deep discounting (90% off) can signal to customers that your brand has low value. Use 'Mystery Boxes' or outlets to hide these prices.
What is Clearance Recovery Calculator?
This calculator performs a 'Cash Recovery Analysis'. It projects the total cash generated at various discount tiers and compares it against the original capital investment (Cost of Goods).
Best For
- • End of Season planning.
- • Warehouse cleaning.
- • Deciding to scrap or sell.
Limitations
- • Assumes you can sell 100% of units at that price (demand elasticity).
- • Ignores transaction fees.
Alternative Methods
Markdown Optimizer
A time-based approach to gradual markdowns.
Industry Applications
See how this methodology generates real revenue uplift in different sectors.
Apparel Brand
Warehouses full of last year's coats.
Calculated storage costs vs 70% off sale.