– How are stores like Marshall’s, Ross, and TJ Maxx able to sell things for a cheaper than retail price?

Question

– How are stores like Marshall’s, Ross, and TJ Maxx able to sell things for a cheaper than retail price?

In: Economics

Answer 1

These stores sell a lot of remaindered products, things that didn’t sell very well, last year’s fashions, out of season items, those sorts of things. The whole process goes something like this:

* Michael Kors comes out with a new $100 top, in three designs
* Macy’s buys all three and offers them at retail
* two sell really well, Macy’s orders more
* one does not, and starts piling up in MK’s warehouse
* TJ Maxx comes along, buys them at a steep discount, and offers it for $50