How Retail Sales Actually Work (Markdowns, Cycles, and Clearance Explained)

What are markdowns?

A markdown is when a retailer lowers the price of an item from its original (or previous) selling price. The first markdown might be 25–30% off; later markdowns can go to 50%, 70%, or more. Retailers use markdowns to move inventory that isn't selling at full price, to make room for new stock, or to hit margin targets. The "sale" price you see is usually the result of one or more planned markdowns—not a one-off flash deal.

Sale cycles and seasons

Most retailers run on a calendar. Fashion has spring/summer and fall/winter drops; after a set number of weeks, unsold items get marked down. Electronics often drop around product refreshes (e.g. last year's model before the new one lands). Black Friday, Boxing Day, and end-of-season events are planned peaks—retailers build stock and expectations around them. If you learn a store's rhythm (e.g. "first markdown at 6 weeks"), you can predict when the things you want will get cheaper instead of hoping for a random sale.

Sale cycles are predictable. Once you know when a store typically marks down, you stop paying full price for things that are about to drop.

— On Sale

How clearance works

Clearance is the final stage: getting rid of what's left. Items that didn't sell through earlier markdowns end up in clearance sections, outlet channels, or discount retailers. Prices here can be 70% off or more—but selection is limited and sizes or colours may be gone. Clearance is where retailers cut their losses; for you, it's where the deepest discounts live, as long as you're flexible on exact item or timing. Some stores also "clear" seasonal or discontinued lines to make space for new inventory, so end-of-season and clearance often overlap.

Why this matters for you

When you know that markdowns follow a pattern and that clearance is the last step, you can shop smarter. Don't assume "sale" means the lowest price—there may be another markdown or a clearance phase later. Use filters (e.g. by discount level) to see what's genuinely reduced now. Set alerts for brands or categories you care about so you're notified when new markdowns land. And if you're after the steepest possible discount and can wait, aim for clearance—but be ready to accept less choice and to move fast when something you want appears.

Summary

Retail sales are driven by markdowns (planned price cuts), sale cycles (seasonal and calendar-based), and clearance (final markdowns to clear stock). Understanding these helps you time purchases, tell real deals from marketing, and use tools that surface live sale data so you see actual discounts—not just "sale" tags. Shop by discount level when you can, and align your buying with when stores actually drop prices.