Why Do Outlet Stores Offer Such Big Discounts on Their Products?

Why Are Outlet Stores So Popular?

The economic downturn in the United States has been a terrible blow to many retail stores. In most shopping malls around the country, one out of every eleven store sites is empty because they just can't attract customers and stay in business. Outlet stores, on the other hand, are doing exceptionally well. New shopping malls that feature nothing but outlet stores are opening up all over the place.
It's no secret that the main reason for the success of outlet stores is the major discounts they give on their products. How do outlet stores sell goods at such cheap prices?

The Things Sold at Outlet Stores Are Not the Very Latest Products.

The products sold at outlet stores are generally last year's things that did not sell out. The products are no longer the very latest thing, but they are still of good quality and virtually all of them have never been used, so the brand doesn't want to just throw them away. Besides, storing these goods in a retail store is not practical, because retail stores tend to be small and in places where the rent is quite high. So, the brand cannot afford to keep a lot of goods that are not very new in these small retail shops. So, they sell them at the outlet store.
However, not all of the goods sold at outlet stores started out by being sold at retail stores. In fact, many outlet stores do not sell any items that were previously sold in a retail store.

Outlet Store Products Are Often of Lower Quality Than the Ones Sold in Retail Stores.

Now that outlet stores have become such a big business, many brands produce products just for their outlets. These products are never sold at the retail level; they go directly to the outlet store. Generally, these products are of lower quality than the ones sold in the fancy and more expensive retail stores.
So, if you are buying clothing, the clothing may have less stitching, less embroidery, less detail, or a lower thread count. You will probably not be able to tell the difference from the things sold at the retail level, but the difference is there. Usually, these clothes are produced cheaply at different factories than the ones the brand may normally use. Since the cost of producing the goods is lower for the brand, they can sell it at a lower price to you.

Operating an Outlet Store Is Cheaper Than Operating a Retail Store.

Even though outlet stores tend to be very big, they are also usually out in suburban areas where the rents are much cheaper. Retail stores are smaller, but they need to be in the most central, downtown locations in the big cities in order to attract the largest number of customers possible.
Also, outlet stores tend to be very plain. They are usually just one story, on a single level, without a lot of complicated window and in-store displays. There is not a lot of fancy decoration in an outlet, just many shelves and tables packed with products.
All of this means that it is easier and cheaper for a brand to run an outlet store than a retail store. Since their overhead is lower, they can charge lower prices.