How deep should an end-of-season markdown be?

Deep enough to clear the residual units in the weeks you have left, and no deeper. Work backwards: take the units remaining, the weeks before the exit date, and the weekly sell-through each depth has historically produced, then choose the shallowest depth whose projected sell-down reaches your ending-stock target in the slow case.

What is an end-of-season markdown?

It is the final scheduled break in a seasonal plan, taken to convert leftover inventory into cash and floor space before the next season's product arrives. Unlike earlier breaks, its job is not margin optimisation — it is hitting a terminal inventory target by a fixed date.

When should the end-of-season markdown start?

Far enough before the exit date that the projected weekly sell-down can actually finish. If a 50% break moves 40% of remaining units per week, three weeks clears most of the stock; one week does not, no matter how deep the discount. Count backwards from the date the space is needed.

How should clearance be priced against cost?

Above salvage or liquidation value, which is the real alternative. Once the price is above what a jobber or bulk buyer would pay, a clearance sale that recovers cash and clears space beats holding dated stock — even at a maintained margin near zero. What you should not do is discount into that range while weeks of ordinary demand remain.

What do I do with units that still do not sell?

Decide the exit route before the season ends rather than after: liquidation, outlet or off-price channel, bundling, donation for a tax deduction where applicable, or carryover if the item is genuinely non-dated. Put a recovery-per-unit figure on the chosen route and include it in the plan, so leftover units are valued honestly instead of assumed away.

Does a deep clearance damage full-price selling?

A predictable clearance calendar can train customers to wait, which shows up as softer full-price weeks in the next comparable season. Two mitigations: vary the timing rather than repeating the same week every year, and keep the deepest breaks narrow — specific classes and residual stock, not the whole assortment.

End-of-season markdown strategy

The last break has a different job from the ones before it. Earlier markdowns trade margin for velocity; the end-of-season break exists to hit a terminal inventory number by a fixed date. That makes it a backwards calculation — from units remaining, weeks left, and the sell-through each depth actually produces, to the shallowest depth that still clears the stock.

Size the final break Full markdown strategy guide

Work backwards from the exit date

Take the units you expect to be holding when the clearance period starts, the number of weeks before the space is needed, and your ending-stock target. Then test depths against the weekly sell-through each one has historically produced. The example below runs 200 residual units across a three-week clearance window.

Sizing the final break: 200 units remaining, 3 weeks to the exit date

Depth	Weekly sell-through	Weeks	Cleared	Ending stock
30% off · $34.30	18%	3 wks	~45%	110 left — misses the target
40% off · $29.40	26%	3 wks	~59%	82 left — still short
50% off · $24.50	38%	3 wks	~76%	48 left — hits a 50-unit target
60% off · $19.60	48%	3 wks	~86%	28 left — clears, at a lower margin

Weekly rates are illustrative — use your own history. The point is the method: choose the shallowest depth that still hits the target in the slow case, rather than defaulting to 50% off.

Exit routes

Decide the destination for residual units before the season ends

Every plan should carry a recovery-per-unit figure for whatever does not sell. Assuming zero leftovers is how markdown plans quietly fail.

Off-price or outlet

Moves volume without discounting your primary channel. Recovery is modest but predictable, and it keeps the clearance out of the storefront where full-price customers see it.

Liquidation or jobber

The floor on any pricing decision. If your clearance price is heading below what a bulk buyer would pay, sell the lot instead of eroding the brand and the calendar.

Carryover

Only for genuinely non-dated product. Charge the plan for storage and carrying cost, and be honest about whether next season's version will compete with it at full price.

Planning the end-of-season break

1
Fix the exit date first
The date the floor space, warehouse slot, or open-to-buy is needed for the next season. Everything else is derived from it.
2
Forecast the units you will actually be holding
Run the earlier breaks forward with honest sell-through rates. The residual figure, not the original buy, is what the clearance has to clear.
3
Test depths against the runway
Choose the shallowest depth that reaches the ending-stock target in the slow case of the sensitivity band, not the midpoint.
4
Attach a recovery value to leftovers
Whatever route you have chosen — off-price, liquidation, carryover — put a per-unit number on it so the plan's cash figure is real.
5
Keep the deepest break narrow
Apply it to the residual classes rather than the whole assortment, and vary the timing year to year so customers do not learn to wait for it.

Keep planning

Model the whole sell-down
Set the recovery-per-unit value for leftovers and read cash recovered as a range.
When to mark down inventory
How to avoid arriving at the clearance window with more stock than it can clear.
Fashion retail markdown planning
Size and colour breaks, and why apparel clearances behave differently.
Maintained markup calculator
What the final break leaves you across the full season mix.

Answers

End-of-season markdown questions

Find the shallowest break that still clears

Enter your residual units, the weeks to your exit date, and an ending-stock target — then compare depths on cash recovered and maintained margin.

Open the markdown planner