Top 3 reasons to sell scratch-and-dent merch
By Joseph Stepke, Acima Leasing
For many dealers, the idea of selling scratch-and-dent products that are slightly damaged, typically during shipping, may seem like a risky move. Concerns around customer satisfaction, reputation and profitability often cause hesitation.
However, selling scratch-and-dent items can present a lucrative opportunity when handled strategically.
Let’s explore three key reasons why BrandSource members should embrace this category and how the common perception is just that, and not the reality.
Attracting Budget-Conscious Shoppers
Perception: Dealers often worry that offering scratch-and-dent items will drive away customers who are looking for high-quality products and damage the store’s reputation as a provider of premium goods.
Reality: The opposite is often true. Selling scratch-and-dent items allows dealers to tap into a growing segment of budget-conscious shoppers who are willing to accept minor imperfections in exchange for significant discounts. These shoppers often view minor damage as negligible when they can save 40-70% off the retail price.
Instead of scaring away quality-focused customers, this strategy can help you cater to a broader audience.
Additionally, today’s consumers are increasingly open to buying imperfect items, especially if the imperfections do not impact functionality.
These products provide an excellent opportunity for dealers to market themselves as offering great deals while remaining transparent about the condition of the goods. This kind of honesty builds trust and attracts a diverse range of shoppers.
Reduce Inventory Waste, Increase Turnover
Perception: Retailers fear that scratch-and-dent merchandise will pile up, taking valuable space, leading to unsold stock and ultimately resulting in losses.
Reality: Rather than accumulating waste, selling scratch-and-dent products can lead to faster turnover and less unsold inventory.
These items, which might otherwise be discarded or returned to suppliers, can be offered at discounted prices, quickly finding buyers who are looking for functional, affordable alternatives.
Large retailers like Lowe’s and Best Buy have launched dedicated scratch-and-dent and open-box outlet stores, driving substantial sales from what could have been seen as “waste.”
Moreover, offering discounts on these items can help dealers move products quickly, reducing the financial strain of holding onto damaged goods. Dealers can integrate these products into special promotions, clearance sales or bundle offers, ensuring they free up valuable floor space for newer inventory.
Building a Reputation for Affordability, without Sacrificing Quality
Perception: Members worry that selling imperfect products might harm their brand image, making customers believe they are cutting corners on quality.
Reality: When properly executed, selling scratch-and-dent items can enhance a dealer’s image as a customer-focused and value-driven business.
Many consumers are looking for ways to save money and by offering discounts on products with minor imperfections, members can position themselves as providing high value. These goods are often still under warranty or backed by customer service, which reassures buyers they are purchasing quality merchandise at a discounted price.
As BrandSource member and TWICE Top 20 dealer Albert Lee Appliance notes on its website, “The beautiful thing about scratch-and-dent appliances is that [they] are brand spanking new. They’ve never been in someone’s home, returned or been used by another customer, so purchasing a scratch-and-dent appliance is an awesome way to get a brand-new appliance at a lower cost.”
By clearly communicating that these items are merely cosmetically damaged and fully functional, dealers can maintain the perception of quality while addressing the needs of cost-conscious consumers.
Many retailers offer factory warranties or service agreements on scratch-and-dent products, which can further enhance the customer experience and foster long-term loyalty.
To Sum it Up …
While some dealers may initially have reservations about selling scratch-and-dent items, the potential benefits far outweigh the challenges.
By tapping into a budget-conscious market, reducing inventory waste and positioning the store as both affordable and customer-focused, members can turn scratch-and-dent sales into a profitable part of their business strategy.
With the right marketing and customer communication, these products can enhance, not diminish, a dealer’s brand.
Joseph A. Stepke, aka “Joe the Finance Guy,” is a sales manager and brand ambassador for Acima Leasing, a provider of lease-to-own solutions for retailers. Contact Joe at (615) 775-1597 or joseph.stepke@gmail.com to learn more ways to grow your sales.
