Off-price retail: definition and how it buys
Off-price retail is a store model that sells branded merchandise below its original or full price, using goods bought opportunistically from other companies' excess: overruns, canceled orders and end-of-season stock. The assortment changes constantly, and the store's appeal is the brand-name find at a lower price.
Reviewed by Tyler Kober · Updated
Key takeaways
- Off-price stores sell brands below the original price; discount stores sell everyday goods at low prices all the time.
- Off-price buyers buy opportunistically, close to the season, in branded first-quality goods.
- Compare-at prices in off-price retail should be truthful and verifiable.
What does off-price mean?
Off-price is a retail model that sells branded goods below the price they first sold for. The store buys goods other companies cannot sell at full price, such as production overruns, canceled orders and end-of-season stock, and passes part of the discount to shoppers. The assortment changes all the time, which keeps shoppers coming back.
How off-price buying works
Off-price buyers are opportunists in the good sense. They do not order a full season months ahead. They wait for excess to appear and buy it quickly when the price, brand and timing fit. What they look for:
- Branded, first-quality goods, usually new with tags.
- Season fit: in-season or next-season goods sell better than last season's.
- Size and color balance in apparel and footwear.
- A clean paper trail that shows the goods are genuine.
Brands sell to off-price buyers because it clears excess in one sale. Many add conditions, such as no online resale, to protect their full-price channels.
Example
A footwear brand's retail customer cancels a large order after production. The shoes are current, boxed and in a full size run. An off-price chain buys the lot, puts the shoes in stores within weeks, and prices them below the original retail with a compare-at price backed by the brand's current pricing.
The common confusion
Off-price, discount and outlet are often treated as one thing:
| Model | What it sells | Where goods come from |
|---|---|---|
| Off-price | Many brands below original price | Other companies' excess |
| Discount | Everyday goods at low regular prices | Regular wholesale plus closeouts |
| Outlet | Usually one brand's goods | The brand's own excess and made-for-outlet goods |
Off-price stores sell to consumers; jobbers sell to other businesses. Both buy closeouts, but in very different ways. For how discount and value retailers fit together, see the bin and discount store guide.
Related terms
Frequently asked questions
What is the difference between off-price and discount retail?
Off-price stores sell branded goods below their original price, with assortments that change constantly as new opportunistic buys arrive. Discount stores sell everyday goods at low regular prices, often lower-cost brands and private label, with a steadier assortment. Both buy closeouts, but for different reasons.
What is opportunistic buying?
Buying goods when an opportunity appears rather than ordering a season in advance. Off-price buyers wait for brands and retailers to have excess, then buy quickly at a discount. The skill is recognizing a good buy fast and passing on the rest, since supply and timing are unpredictable.
Is an outlet store the same as off-price?
Not exactly. An outlet is usually run by the brand itself to sell its own excess, and many outlets also sell goods made specifically for outlet stores. An off-price store sells many brands it buys from others. The two models overlap in what shoppers see but differ in who owns the goods.
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