Posted in Marketing and Strategy Terms, Total Reads: 522

Definition: Closeout

A closeout is defined as the process of selling off goods to completely clear the inventory on huge discounted prices. It is like a clearance sale in which all the products of a particular season. The products are also sold off based on behaviour.

In which all the loyal customers are notified about the most frequently purchased products to help them get the same at lower price. This helps the company build a long term relationship with customer as they are being notified at a time when they are actually going to restock the items. The mail is sent automatically based on the past purchase behaviour of the customers. The competition for the retailer reduces in this method because the other players might not have access to such products at discounted price.


• Seasonal goods

• Store closing

• Obsolete goods replaced by newer products

• Bankruptcy

• Change in fashion

• Customer returns after the holidays

With the help of the internet many websites have made huge profits by auctioning the clearance stock at a lower price. The customer hunts for lower price though time and convenience are also important factors. New services like direct to customer has helped the e-commerce company’s big time by reducing their inventory as well as maintenance cost.



A study of some consumers revealed that the marketing concept "clearance" has different psychological effects than the related term "sale”. According to the study, the term "clearance" makes the consumers feel as if the discounts will be deeper than when the marketers use the term “sale.” Also, study participants expected the quality of the merchandise to be cheaper when the marketing efforts used "clearance" instead of “sale.”

The customers have a dilemma whether the quality of a clearance product be good, will it be of standard-quality or is it the aggregate manufacturers surplus. The promotion needs to gently talk about the after sales service and replacement guarantee.


Hence, this concludes the definition of Closeout along with its overview.


Browse the definition and meaning of more terms similar to Closeout. The Management Dictionary covers over 7000 business concepts from 6 categories.

Search & Explore : Management Dictionary

Share this Page on: