The Clearance Engine

The Setup

Step 1: Identify Your Dead Inventory

Go to WooCommerce > Analytics > Products. Sort by “Items Sold” ascending over the last 90 days. Your dead inventory is at the bottom: products with few or zero sales.

Make a list of 10-15 products you want to clear. Categorize them:

• Clearance Tier 1 (light discount): Products that sell occasionally but need a push. Discount 15-25%.
• Clearance Tier 2 (deep discount): Products that haven’t sold in 60+ days. Discount 30-50%.
• Clearance Tier 3 (liquidation): Products you need gone. Discount 50-70% or use as free gifts.

Step 2: Set Up the Announcement Bar

Go to Caddy > Settings > Announcement Bar.

Write clearance-specific copy that creates urgency:

• “Clearance: Up to 50% off select items. While supplies last.”
• “Final Sale: Last chance on [Season] styles. Prices won’t go lower.”
• “Stock Clearance: {first_name}, save big on items we’re making room for.”

Include a link to your clearance category page if possible.

Step 3: Create a Clearance Recommendation Workflow

Go to Caddy > Workflows and create:

Workflow: Surface Clearance Items

• Trigger: Added Product(s) to Cart
• Rules:
• Product Category does not include “Clearance” (don’t show clearance to someone already buying clearance)
• Action: Display Product Recommendations
• Type: Manually Select
• Products: Your top 4-6 clearance items (pick the best-looking ones with the deepest discounts)
• Heading: “On Sale: Limited Stock”
• Discount Type: Percentage
• Discount Amount: Match your clearance pricing

Why this works: A customer buying a full-price product sees deeply discounted clearance items as add-on suggestions. The price contrast between their full-price item and the clearance recommendations makes the clearance items look like steals. And because they’re already spending money, the marginal cost of adding a cheap clearance item feels negligible.

Step 4: Create a Category Match Workflow (Optional)

For clearance items that belong to a specific category, create a targeted workflow:

Workflow: Category Clearance Match

• Trigger: Added Product(s) to Cart
• Rules:
• Product Category includes “Skincare” (or whatever category matches your clearance)
• Product does not include [Clearance Product 1, 2, 3…]
• Action: Display Product Recommendations
• Type: Manually Select
• Products: Clearance items from that same category
• Heading: “Last Chance: [Category] Sale”
• Discount Type: Percentage
• Discount Amount: Your clearance discount

A customer buying a full-price serum sees clearance serums from last season at 40% off. The relevance is high because it’s the same product type they’re already interested in.

Step 5: Use Clearance Items as Rewards Meter Gifts

This is where it gets strategic. Go to Caddy > Settings > Rewards Meter.

Set your Tier 2 reward type to “Free Gift” and select a Clearance Tier 3 product (one you’d practically give away anyway).

“Spend $75 and get a free [Clearance Product]!”

You’re doing three things at once:

1. Increasing AOV (customers spend more to reach the tier)
2. Moving dead inventory (the “gift” clears a product that wasn’t selling)
3. Introducing customers to a product they might reorder later (if they like it)

The cost to you is the product’s wholesale value, which is minimal for items you were considering writing off. The value to the customer is the retail price, which makes the reward feel generous.

Step 6: Feature Clearance Coupons in the Offers Tab

Create a clearance-specific coupon in WooCommerce:

• Code: CLEAR30 (or similar)
• Discount: 30% off (or match your clearance tier)
• Product restriction: Only applies to products in your “Clearance” category
• Usage: Unlimited (you want volume)

Go to Caddy > Settings > Offers. Add this coupon to the Offers tab.

Now every customer who opens the side cart sees “CLEAR30: 30% off clearance items.” Even if they’re not buying clearance products, the coupon plants a seed. Some will browse your clearance section just because the discount is available.

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Why It Works

The Contrast Principle. A $45 product next to a $15 clearance item (was $35) makes the clearance item look like an incredible deal. The full-price product in the cart anchors the customer’s spending expectations higher, which makes the clearance price feel like nothing.

Loss Aversion on Inventory. Framing clearance as “last chance” and “while supplies last” triggers loss aversion. Customers don’t want to miss a deal. The limited stock framing makes clearance feel like an opportunity, not a leftovers bin.

The Free Gift Reframe. Using dead inventory as a Rewards Meter gift turns a liability into an asset. You’re not dumping products at a loss. You’re “rewarding” customers for spending more. The psychological framing is completely different. One feels desperate. The other feels generous.

Marginal Cost Psychology. A customer who’s already committed to a $60 purchase views a $12 clearance add-on as marginal. “I’m already spending $60, what’s another $12?” The clearance item rides on the buying momentum of the primary purchase.

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Expected Results

• Clearance item sell-through: 30-50% of featured clearance items sold within 30 days (compared to 5-10% without active promotion)
• AOV impact: Neutral to positive. Clearance add-ons increase cart value even at discounted prices.
• Inventory recovery rate: Recover 40-70% of your cost basis on dead inventory (vs. 0% if you eventually write it off)
• Free gift tier engagement: 15-25% of orders will include a clearance item used as a Rewards Meter gift
• Capital freed up: Depends on your dead inventory value, but clearing even $5,000 in dead stock frees up capital for products that sell.

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Rotation Strategy

Don’t feature the same clearance products forever. Rotate every 2 weeks:

Week 1-2: Feature your best-looking clearance items (good photos, broad appeal)

Week 3-4: Swap in different clearance items. Move items that sold well to the Rewards Meter gift slot. Remove items that didn’t sell despite heavy promotion (these may need steeper discounts or a different channel like wholesale/liquidation).

Update your workflow’s manually selected products, your Offers tab coupon, and your Rewards Meter gift product during each rotation.

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Variations by Store Type

Fashion/Apparel: End-of-season clearance is natural. Feature last season’s styles as “Final Sale” recommendations. Use the Rewards Meter gift for accessories (scarves, hats, jewelry) that are season-agnostic.

Beauty/Skincare: Products approaching expiration or discontinued formulas. Frame as “limited edition, last batch.” Use as Rewards Meter samples (“Free full-size [Product] with orders over $X”).

Home Goods: Discontinued patterns, colors, or one-off items. “One of a kind” framing works here. Clearance home items make great Rewards Meter gifts because they feel premium.

Food/Supplements: Products approaching best-by dates. Deep discounts are expected. “Stock up and save” framing encourages bulk buying of items nearing expiration.

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Common Mistakes to Avoid

Featuring ugly or damaged products. Just because it’s clearance doesn’t mean it should look bad. Only feature products with good photos and appealing descriptions. Bad clearance recommendations damage your brand perception.

Running clearance forever. If a product doesn’t sell after 60 days of active promotion through Caddy, the issue isn’t visibility. The product doesn’t have demand at any price. Move it to a wholesale/liquidation channel and stop featuring it.

Cannibalizing full-price sales. Make sure your clearance recommendations don’t compete with full-price products. If you’re clearing a cleanser at 50% off and recommending it alongside your new full-price cleanser, you’re stealing your own sales. Exclude categories or products that compete directly.

Forgetting to update inventory counts. When a clearance product sells out, remove it from workflows and the Offers tab immediately. A “sold out” message in the side cart recommendations is frustrating for customers and wastes the recommendation slot.

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Next Steps

Inside Caddy:

• The Data-Driven Cart (Pro): After running the Clearance Engine for a month, analyze which clearance items sold and which didn’t. Use this data to inform future buying decisions and identify products that should be discounted earlier before they become dead stock.
• The Conditional Offer Funnel (Pro): Build workflows that target specific customer roles with clearance offers. Wholesale customers get bulk clearance pricing. Retail customers get individual clearance deals.

Beyond Caddy:

• Clearance email campaigns. Send a dedicated clearance email to your list: “We’re making room for new arrivals. Up to 50% off [Category].” Include product images of the same items you’re featuring in Caddy recommendations. Customers who see the email AND see the same products in the side cart experience a multi-touch exposure that dramatically increases conversion.
• Flash sale events. Run a 24-hour flash sale on clearance items. Promote via email and social. During the flash sale, the Caddy announcement bar, workflows, and Offers tab all reinforce the same message. The urgency of a time-limited event paired with the side cart visibility creates a clearance event that moves significant volume.
• Wholesale/B2B clearance. For products that won’t move at any retail discount, offer them at wholesale rates to B2B customers or other businesses. This recovers more value than writing them off.
• Bundling clearance with new products. Create a “New + Classic” bundle: one new product plus one clearance item at a combined discount. This moves clearance while introducing new products simultaneously. Feature these bundles as Caddy recommendations.
• Donation for tax benefit. For products that truly won’t sell at any price, donate them. The tax write-off may be worth more than the product’s clearance value. And you clear the inventory permanently.