Why Is TJ Maxx So Cheap? (10 Reasons Why)

TJ Maxx is justifiably known as the home of adventure shopping, where you can find all kinds of quality items at low prices, and shoppers have often wondered how the company manages to sell leading brands at such heavy discounts.

So, why is TJ Maxx so cheap, and how does the company manage to sell designer brands at such low prices? If you’d like to find out, keep reading!

Why Is TJ Maxx So Cheap In 2022?

TJ Maxx is able to sell famous brand names for low prices because its buyers purchase excess inventory from designers, manufacturers and vendors at heavy discounts. Further, TJ Maxx stores have a low markup, so the company can pass on the savings to customers. TJ Maxx also doesn’t have any advertising costs or extras in its no-frills stores in 2022.

To find out more about why TJ Maxx is so cheap and what it means for you, carry on reading for more useful and interesting information!

1. Savvy TJ Maxx Buyers Tap Many Different Sources 

TJ Maxx has savvy buyers whose job it is to track down excess inventory wherever it may be, and to snap it up at bargain prices. TJ Maxx buyers look for excess inventory in many different places, with manufacturers, vendors and department stores.

They also use a mix of buying strategies that include using varied sources like big name brands, boutique designer labels, and unique finds from around the world. 

As a nationwide retailer with thousands of stores across the US, TJ Maxx has a lot of negotiating power, allowing the company to buy up excess inventory at low prices.

Another reason why buyers are able to negotiate better prices is because, unlike department stores, TJ Maxx does not have a “buyback clause” requiring designers to buy back unsold clothing.

Therefore, designers are more willing to sell at lower prices to TJ Maxx because they don’t have to incur the extra costs under a buy back clause.

2. TJ Maxx Doesn’t Advertise Big Brand Name Products

TJ Maxx does not spend on advertising designer labels, which saves the company a lot of money vis-à-vis the large department stores.

Rather, shoppers have come to expect that they will be able to find designer labels at bargain prices without TJ Maxx having to advertise the fact. 

3. TJ Maxx Buyers Shop All Year

Most large department stores buy stock only a few times a year, and acquire enough inventory for a full shopping season. However, TJ Maxx uses a mix of strategies for bringing inventory to stores.

TJ Maxx buyers shop all year and keep a sharp lookout for trendy and classic items that customers will like. They are prepared to snap up a bargain whenever and wherever they find it, rather than being limited to shopping only a few times per year.

4. Low Markdowns in TJ Maxx Stores Pass on the Savings to Customers

After TJ Maxx buyers acquire inventory at low prices, the company passes on the savings to customers. TJ Maxx has a very low markup on designer items compared to the big department stores, so the company is able to keep prices 20 to 60% lower.

5. Overproduction or Misorders By Manufacturers

Sometimes manufacturers overproduce items, or a vendor/department store may cancel an order, which allows TJ Maxx to buy the inventory at lower prices.

Occasionally, manufacturers will get the designer’s instructions wrong and make a minor mistake in production, and while this doesn’t affect the quality of the products, it will usually be refused by the designer.

In such cases, TJ Maxx buyers will step in and purchase the inventory at a cheaper price.

6. Department Store Overstocks

6. Department Store Overstocks

Often, department stores over-buy and are left with excess quantities of an item that isn’t selling, and need a way to get rid of the extra stock to make room for newer items.

To help their bottom line, many companies are happy to offload the merchandise to TJ Maxx buyers at low prices. Note that TJ Maxx doesn’t acquire defective or out-of-season merchandise, but quality brands that the company can offer to customers at low prices.

7. End-of-Season Merchandise

TJ Maxx will buy excess inventory late in the season when manufacturers and vendors are motivated to sell at very low prices.

8. Exclusive Labels Produced for TJ Maxx

Some TJ Maxx merchandise is produced exclusively for the company. These exclusive labels could be from leading fashion designers or small, artisanal manufacturers.

These items are chosen for their quality and appeal to TJ Maxx customers. For example, you’ll find high quality Italian merino wool and leather products at very affordable prices in TJ Maxx locations.

9. Past Season Styles

A small selection of the merchandise at TJ Maxx is from the previous season, which tend to be classic, timeless styles that are heavily discounted.

10. No Frills Store Design

TJ Maxx stores and websites have a no-frills, flexible design, so different sections can be expanded or changed according to the merchandise available. This lets the company change the display according to seasons and changing customer tastes as well.

To know more, you can also see our related posts on TJ Maxx clearance return policy, when does TJ Maxx restocks, and TJ Maxx return policy without receipt.

Conclusion

TJ Maxx buyers use a mixture of strategies to buy excess inventory of leading brand products from manufacturers, vendors and department stores. They also have a lot of negotiating power to get the best prices for the inventory.

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Marques Thomas

Marques Thomas graduated with a MBA in 2011. Since then, Marques has worked in the retail and consumer service industry as a manager, advisor, and marketer. Marques is also the head writer and founder of QuerySprout.com.

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