Top 5 Reasons for Tool Clearance Sales at Hardware Stores

Published September 16, 2024

We’ve all found ourselves in this situations. We find ourselves in an aisle of a store (and occasionally online) looking at a product that is on clearance that has been a part of a brands product line for years. At first it leads to a little skepticism. Why is this tool so cheap? Is this a refurb? There must be something wrong with it… right?

There are several reasons tools will go on clearance or a significant sale, despite the model continuing to be carried afterwards.

1. Inventory Management

  • Clearing Excess Stock: Retailers may have overestimated demand (especially during anticipated spikes in shopping, like holidays. See below) and ended up with excess inventory. A clearance sale helps clear out this excess to make room for new stock, even if the item is still part of their regular lineup.
  • Seasonal Transitions: Retailers might need to clear seasonal items to make room for new seasonal products. It’s why we can find snow shovels on sale when it’s snowing. It might be late in the year and stores need to clear space for spring inventory. While the item might remain a staple, they need to adjust inventory levels for upcoming trends or seasons. The recent lawn and garden sales we’ve spotted is a great example of this.

2. Product Refresh or Rebranding

  • New Packaging or Versions: Retailers may need to sell off older versions of a product due to a new version or updated packaging being released. The product itself isn’t discontinued, but the old stock needs to be cleared out to focus on the new one. On tools, this might be new components in the box for bundles. A new power tool battery line as part of a bundle, unless it generates a new sku, would require updated packaging.
  • Rebranding Efforts: Sometimes, brands undergo rebranding efforts and clear out products with the old brand name, logo, or packaging while retaining the product itself.

3. Sales Boost and Customer Attraction

  • Drive Traffic and Sales: Clearances and sales attract customers to the store, increasing foot traffic and online visits. While customers are there for the discounted items, they are also more likely to purchase full-priced items.
  • Stimulate Demand: Offering a discount can boost demand for a product, allowing retailers to sell more volume. This is particularly useful for products with a high-profit margin even when discounted.

4. Pricing Strategy and Market Positioning

  • Perceived Value: Regular clearances can help create a perception of value and urgency among customers. If customers know that certain items often go on clearance, they might perceive the retailer as offering better deals.
  • Dynamic Pricing Strategy: Retailers may use clearance pricing as part of a dynamic pricing strategy, adjusting prices based on sales trends, competitor pricing, and consumer demand. This is a common strategy of Amazon and why you might see a different price by lunch time on a tool that you looked at that morning.
  • Matching Competitor Discounts: If competitors are offering sales or discounts on the same or similar items, a retailer might offer a clearance sale to match or beat those prices and maintain competitiveness in the market.

5. Marketing and Promotional Opportunities

  • Highlighting Promotions: Retailers may use clearances as a promotional tool to increase visibility for certain items, creating a buzz around the product and increasing its popularity or awareness among consumers.

By offering clearances on items they will continue to carry, retailers can strategically manage inventory, attract customers, and respond to market dynamics without discontinuing those products.

We try to keep up with deals on tools and get excited when we find the real deep discounts—clearances for tools that will continue to be supported in product lines for years.

Posts on Slice Hardware are for information purposes only and not advice for projects, tool use, or safety.