How to make money with these 6 Types of Retail Products
I’m not sure I’m referring to you, but many small retailers believe that customer service is their real competitive advantage.
But however great your customer service is, if you’re not selling the relevant retail products, you will not make the kind of money you dreamed of.
Does that mean that you rush out and start buying any and every retail product that you think will sell in your store?
Or do you buy only those which your competitor is selling and hope you get a similar or even better response?
I bet you’re smart enough to want to have some meaningful strategy for acquiring your retail products.
Well if that’s true, here are 6 types of retail products you should carry if you really want to make money.
Have you ever driven way across town to buy an item which you want, mad at yourself all the way? You did this because you could not get this item from anywhere else? This is a destination product.
Destination products are retail products which people come to your store specifically to buy – your signature products.
They can be products which are better than those of your competitors or some that your competitors simple neglect to carry. They can also be limited or retro versions of regular item.
Look around your store and see if you have any of these items. If you do, re-position them through clever marketing as destination products.
If you don’t have any, you may want to research which retail products can serve this purpose for you. Destination products can really increase your cash flow.
Recently, I wandered into a small hardware store and was pleasantly surprised. This store had several high-end retail products which made me think “ Wow! I like this store! I have to tell my friends about this!”
These types of retail products are called image enhancers.
Image enhancers are a cut above the rest of your inventory and are intended to wow your customers and get them talking about your store.
The problem is that these products don’t generate a lot of sales by themselves, so you should limit how much you carry.
Limiting these products to about 10% of your overall inventory mix is a good way to ensure you have money to spend on the income-generating products.
A transaction builder is a retail product which drives the add-on sale. Here is an example of how it works.
You go to the household section of your favorite hardware store to purchase a simple green sheet for your bed.
With the assistance of the helpful sales associate, you realise you need pillowcases, a duvet and a set of 3 throw cushions to really make your bedroom look sexy.
Therefore, the store owner can give an attractive discount on the price of the sheet and rely on the huge margins on the accessories to make the money.
What I love about transaction builders is that with a little imagination, you can create them throughout your store.
However, you will really make money when your sales associates know about the strategy and are using their selling skills to make the add-on sales.
The definition of these retail products is in the name – traffic builders build traffic.
So, do you have some merchandise that encourage customers to come to your store again and again? And that make them spend more time (and money) in your store?
A traffic builder might also be strong visual merchandising such as an in-store interactive display or a clever eye-catching display located just outside your store.
This type of retail product, supported by visual merchandising techniques, create a buying energy that ends up as money in your bank account.
Profit generators are those items which have high profit margins.
Store owners usually rely on buying closeouts from their vendors to satisfy this need and this is alright. But a great source of profit generators are those retail products which also serve as transaction builders.
When you have a good mix of these two types of products in your merchandise and marketing mix as we say in my country “yuh gone clear!”
There is a time when you focus on the customers and it’s not about what you like. That’s when you’re selecting turf protectors.
They are those retail products which if you don’t sell them, very few customers will shop with you. Sometimes a product is undesirable not of itself, but because it attracts a certain type of customer.
Retailers typically don’t enjoy carrying this type of merchandise because it does not make them money, but they must include them in their inventory mix, in order to make money with the other products they sell.
Your next “retail products” steps…
Now you know that you don’t have to throw mud at the wall and see what sticks, when it comes to developing a strategy for selecting which retail products to sell.
How will you make these 6 product types work for you?
You can begin by looking at your existing products and see how many fit into these categories.
Then, think about the kinds of products you can include in your inventory mix under these product types.
Now go on and devise a strategy for acquiring these retail products.
Enjoy the money you will be making!