twelfth · Glossary · Pricing
Clearance
Clearance is the final markdown that exits a product's remaining stock, at whatever price frees the stock and the space it occupies.
What it means for retail and category teams
Clearance starts once the decision to exit a line has been made: it is being delisted, the season is ending, or it is being replaced. The aim is no longer to manage the line's margin but to recover what the remaining units are worth now, and to release shelf space and working capital for something that will sell. Clearance may run in store, online, through an outlet channel or via a stock buyer.
Why it matters
The money spent on the stock is already gone, so clearance decisions should be made on what the units and the space are worth from here, not on what they cost. Holding out for a better price has its own cost: the space earns nothing, the stock keeps ageing, and the line blocks the range that replaces it.
Illustrative example
The business and figures are illustrative, not customer data
A games retailer has 200 units of a previous-generation controller after the new model launches. At 30% off, the team expects to clear about half in a month. At 50% off, it expects to clear nearly all of them in two weeks and free the bay for the new model's accessories. The deeper cut earns less per unit but more from the space.
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