In recent years, full-price sales in the apparel industry have become increasingly difficult, with inventory pressure, price wars, and high return rates becoming the three mountains crushing merchants. At the same time, the previously overlooked clearance (i.e., low-priced inventory) market has risen abruptly and become the new favorite of many small and medium merchants. According to a report by Ebrun, the clothing clearance market has exceeded 130 billion yuan, and its penetration rate in clothing consumption has risen from 8.2% in 2020 to 12.8%.

In Shijing, Guangzhou, a clearance boss named Lao Chen was still running full-price women's clothing in Hangzhou Sijiqing three years ago, with annual profits of less than 40,000 yuan. After pivoting to clearance goods, his current annual net profit exceeds 200,000 yuan. He mainly buys well-preserved inventory sample garments from factories and then wholesales them at low prices to downstream physical stores and e-commerce customers. Short-sleeve shirts are purchased for 3-8 yuan, hoodies for 10-20 yuan, and sold with a markup of 2-30 yuan, relying on volume to make a profit. His stall's monthly order volume has grown from 3,000 pieces in 2023 to 7,000 pieces this year, and even doubles in spring and summer.

The clearance business's profit comes from extremely low procurement and operating costs. Ordinary goods are purchased at only 10%-30% of the price of similar full-price items, while the retail price can double, with the net profit margin per item generally exceeding 50%, whereas the net profit margin of full-price items is usually less than 10%. Livestreaming has become the main sales channel. Small streamers only need a phone and a small amount of capital to start, finding goods in the market and selling via livestream at night, with an extremely low return rate. At present, successful e-commerce clearance accounts mainly fall into three categories: vertical niche accounts, brand withdrawal accounts, and low-price volume-driven accounts.

However, caution is needed when entering the industry. There is a "mixed batch" trick in the industry, often mixing in moldy, pilled old clothes, and even refurbishing old clothes to pass them off as new. Lao Chen suggests that beginners should focus on product selection fit, ensure ready stock, and rely on connections to obtain stable supply. Although the clearance market is also highly competitive, its high gross margin and rapid turnover still make it a safe harbor for many entrepreneurs.

E-commerce sales already account for 58.3% of clothing clearance, with online channels becoming the main force. Although livestream e-commerce clearance goods are unlikely to shake the traditional position of Outlets and Vipshop in high-end brand clearance, they are seizing mid-range customer groups in the mass market by virtue of price advantages. In the future, the clearance market will show obvious tiered stratification, providing operators with opportunities to avoid the industry's chronic problems and allowing consumers to obtain high-quality goods at low prices.

Source: Clothing Clearance Business Explodes: Small and Medium Merchants Earn 200,000 a Month, Challenging Vipshop and Outlets · Originally published on 2026-08-31