Why Is Marshalls So Cheap? (Top 10 Reasons)

 

If you’re a bargain hunter, chances are you’ve found yourself in a Marshalls store (or a TJ Maxx or Home Goods, which are owned by the same company).

Marshalls has a reputation for being home to great deals on designer clothing, accessories, and décor.

The company boasts that it offers prices of 20–60% less than department stores.

How is the company able to sell products for lower prices than other stores?

We’ll explore ten reasons Marshalls can offer high-quality goods with enticing price tags.

 

Why Is Marshalls So Cheap? (Top 10 Reasons)

 

1. Buying Overstock

 

Stores like Marshalls don’t often purchase inventory straight from designers or manufacturers.

Instead, they get their goods from a variety of other sources.

One of the places company buyers find inventory is overstocked merchandise from other department stores.

This happens when a store buys more product than it can sell.

These stores are then willing to sell the extras for cheaper than they bought them.

Otherwise, the extra stock takes up a lot of room and results in big losses for the company when they have to throw it away.

This is when Marshalls swoops in to purchase the extra product from the stores for a big discount.

Marshalls is then able to pass these discounts on to customers.

Marshalls also occasionally purchases overstock directly from manufacturers.

When the maker of a product creates more than department stores are willing to buy, Marshalls will purchase the goods for reduced prices.

 

2. Store Returns

 

Another source of Marshalls’ inventory is department store returns.

Customers may return items they purchased from retailers for a wide array of reasons, including damage, improper fit, or just a change of mind.

This is especially true of online purchases because 30% of all purchases made online are returned.

Physical stores see a much smaller rate of return at 6.8%.

However, for companies that have hundreds of stores throughout the country, that’s still thousands of items returned per day.

In fact, in North America alone, the number of returned goods in 2020 was worth around $428 billion.

Returned merchandise often delivers a huge financial blow to retail companies.

Part of this loss is because the returned items may not be worth as much as they were originally.

The products may have been opened or off the market long enough that they are no longer in season.

Products for which safety is a concern are also a problem.

Stores can’t always guarantee that a returned baby stroller or automobile part still has all its parts.

This becomes a liability for the retail company.

Another cost for retailers when customers return goods is shipping and handling.

Often, companies will offer free shipping on returns in an effort to be more customer-friendly.

This, however, can ultimately lose money for the retailer, as it must make up the expense.

When retail companies see large influxes of returned goods, they often have to sell them in bulk to prevent huge losses.

Typically, they will sell them to resellers for a much lower price. Marshalls acquires a lot of inventory in this way.

It finds find returned goods from other stores and purchases them at a fraction of the original cost.

It is important to note, however, that although Marshalls sells returned items, the company does have safety standards for its products and takes care not to sell unsafe goods.

 

3. Closeout Deals

 

Overstocked and returned items aren’t the only merchandise Marshalls can get for a great deal.

There are other times retailers will discount inventory in an attempt to get it out of the store.

Customers will often see these in stores as closeout or clearance sales.

Closeout deals happen for several reasons.

One may be that an item isn’t selling well.

Retailers will cut prices on it to incentivize customers or resellers to purchase the product.

Another reason may be that the store is going out of business.

When a retailer closes up shop, any excess inventory represents lost profit.

As the store gets closer to its closing date, items will be marked down more and more to sell as much as possible.

This is especially true of companies that have declared bankruptcy.

These companies need to liquidate their assets as quickly as possible.

Any goods that aren’t sold to customers during a closeout might then be sold to a reseller such as Marshalls.

 

4. Damaged Or Defective Goods

 

Though Marshalls claims that the majority of its products are in perfect condition, some of the merchandise it acquires is indeed defective.

This does not mean that the items are unusable or worthless, just that they are not sellable by a retailer.

For example, a tag may be sewn upside-down in a pair of pants.

This certainly isn’t going to affect the quality or wearability of the pants.

Some brands, however, especially designer brands, won’t send items that don’t meet a certain standard of quality to retailers.

These items are picked up by resellers like Marshalls and sold for much less than the original price.

That being said, it is reported that less than 5% of products at Marshalls are defective in some way.

Most of the clothing and goods you’ll find in these stores are department-store quality.

Any items that do have a defect of some kind will be marked as such.

 

5. No Buyback Policy

 

Many retailers’ sales strategies include what is called a buyback policy.

This is essentially a contract between retailers and suppliers.

It states that the supplier will buy back some or all of the unsold merchandise at the end of the season.

This helps cut losses for retail stores when inventory doesn’t sell as well as they hope.

However, it often means that vendors sell their products to retail stores at higher prices to ensure against losing money themselves.

Marshalls does not have a buyback policy for manufacturers as it purchases its goods for keeps.

Often, this means that suppliers are willing to sell inventory to Marshalls for cheaper since they know they won’t have to buy it back later.

Marshalls is then able to pass its savings on to customers.

 

6. Flexible Purchasing

 

Clothing companies hire people—called buyers—for the sole purpose of finding items to stock in their stores.

Typically, department stores do most of their buying at specific times of the year, so that all their inventory is in season.

Buyers from Marshalls look for clothing and other goods year-round.

This means they are able to find deals from vendors and stores whenever they are available.

It is also common for retailers to only purchase inventory that fits a certain style.

This is done so they can offer products in line with their company brand.

Marshalls buys items from all kinds of vendors—big, recognizable brands, boutique labels, and new designers who may not yet be known in the fashion world.

They also have some goods manufactured specifically for their stores.

Finally, Marshalls often chooses only to stock certain items in certain stores.

This means it can purchase inventory in varying quantities.

This works out in the company’s favor when there is a limited amount of product available.

Rather than skipping over great items because there aren’t enough to stock all stores, Marshalls can snag any hot deals that are available.

This flexibility in stocking its stores allows buyers to hunt for the best deals, rather than restricting themselves by buying only from certain suppliers.

 

7. Out-Of-Season Products

 

Because of the buying strategy of Marshalls, items you find in its stores may not always be in season.

You may find swimsuits in the wintertime or big coats in the summer.

The items may also not always fall in line with current styles and trends.

For this reason, Marshalls offers its products at lower prices.

Of course, it’s not a bad choice to purchase out-of-season clothing items to get a deal.

The wool sweater you buy in June will keep you warm in December, even if it spends a few months waiting in your closet.

It’s worth mentioning, however, that Marshalls claims that most of its clothes are, in fact, in season.

Because its buyers purchase year-round, the stores are able to offer a large amount of seasonally appropriate clothing.

However, just like in any store, the greatest deals will probably be found on clothes that aren’t in high demand at that time.

 

8. Less Selection

 

Since Marshalls primarily purchases items that other stores are looking to get rid of, it may not be able to offer as wide a selection of inventory as other retailers.

For example, a department store may overstock just one or two sizes of a shirt.

In this case, Marshalls will only be able to stock that shirt in the sizes the department store has available for it.

When you shop at Marshalls, you may not be able to find every item in the size or color you are looking for.

This is a compromise that shoppers must make for the great deals at the store.

 

9. No Guarantee Of Restocking

 

In many stores, if the supply of an item is running low, chances are another shipment is already on the way.

Retailers try to keep their shelves well-stocked.

Unless it’s the end of the season or a product isn’t selling well, you’ll probably be able to come back next week and find the item restocked.

This isn’t necessarily true at Marshalls.

Because Marshalls purchases clearance items, returned goods, and out-of-season clothing, there’s no guarantee it will be restocked.

Once a retailer has sold inventory to a reseller, it’s unlikely the retailer will purchase more of those same products.

If they weren’t able to sell them to customers the first time, why would they offer them again?

Therefore, once Marshalls has sold out of an item, it is doubtful it will be getting another shipment.

The exception to this is the inventory that Marshalls has manufactured specifically for its stores.

At Marshalls, when a product is gone, it’s likely gone for good.

This is another reason its clothing and other goods can be sold at lower prices than at other stores.

Customers must make some sacrifices for big discounts.

 

10. Certain Items Of Lower Quality

 

Marshalls sells more than just clothing and décor.

In many stores, you can find food, makeup, hair products, and more for very reasonable prices.

Unfortunately, not all of its products are as high-quality as the clothes and accessories.

Many review sites caution buyers about purchasing makeup or hair products from the reseller.

This is not necessarily because Marshalls purchases faulty or damaged goods.

The items may arrive at the store in good condition.

However, because Marshalls does not offer tester products for things like makeup, many of their beauty products end up being tampered with by customers wanting to try before buying.

Sometimes, this might just result in you getting a bad deal, like inadvertently purchasing a half-used tube of lotion.

Other times, however, it could be dangerous as applying mascara or lipstick that has been used by a stranger could make you sick.

You can still purchase these items from the online store without running these risks.

However, the lack of sample products generates another problem in that there’s no way to know if you like a product before buying.

Other products that reviewers warn Marshalls shoppers about are small appliances and bedsheets.

These items are ones that you may not want to purchase at a discount store, as their quality can vary greatly.

You can find great prices on both products at Marshalls, but you may end up getting exactly what you paid for.

Small appliances may malfunction or break more quickly than name brands.

Many of their bedsheets look cute but are made of synthetic fibers and can be uncomfortable to sleep on.

Marshalls is known for offering great products at great prices, but there are some instances where lower cost may also mean lower quality.

 

How To Find The Best Deals At Marshalls

 

With endless killer deals at this discount store, maybe you’re ready to get out there and try to find some yourself.

It’s true that just about anyone can walk into the store and score big on designer brands.

However, there are some tried-and-true tips for those looking for the absolute best finds.

 

1. Time Your Trip

Shopping in the morning is generally the best way to find items you love, especially at a store like Marshalls.

Since it often doesn’t restock items, it’s important to get to the ones you want first.

Stores get more crowded as the day goes on, especially around lunch and right as people get off work.

If you are able to shop early, you’re more likely to have a better selection to choose from.

It’s also wise to plan what day you are going to do your shopping.

Typically, stores will be better stocked and more organized on weekday mornings, especially Tuesday through Friday.

Weekend crowds can overwhelm stores, emptying shelves and scattering inventory throughout the store.

Monday is generally the day stores catch up from the weekend.

Weekdays are your best bet for a relaxing, rewarding shopping experience.

Even the time of year you choose to shop can help you find better prices.

Around the end of each season, in January and July, Marshalls marks down items to make room for incoming inventory.

If you are willing to purchase clothes at the end of the season, you can get them at a minimal cost.

 

2. Don’t Wait

As was previously mentioned, once a Marshalls item is gone, there’s no guarantee it will return.

Therefore, if you find something you adore, you shouldn’t hold off on purchasing it.

There’s a very good chance someone else will love it just as much as you do, and you may miss your opportunity.

When you find a great deal at Marshalls, it’s best to snap it up as quickly as possible.

 

3. Don’t Be Afraid To Branch Out

Marshalls is primarily known for its low prices on designer brand clothes.

However, there are plenty of treasures to be found in these stores.

They offer great deals on shoes, paper goods, and pet supplies.

Purchasing these items from Marshalls rather than a department store can save you a significant amount of money.

Additionally, the selection of non-perishable foods can lighten the load on your grocery bill each month.

If you are willing to try something new from a brand you haven’t heard of before, you may end up being pleasantly surprised.