Choosing a product for your retail store to sell may very well be the most
difficult decision you will need to make when starting a retail business. Not
only should you consider what products are profitable, but they must be
trustworthy and something you enjoy selling. Before you commit to a product or
product line, consider the following factors while deciding what products to
Will it turn a profit?
No matter what motivates store owners have, a business can't lose money and
stay open in the long term. When it comes to choosing items to sell, calculating
the profit of inventory and comparing it to similar products in other
storefronts - and in local, brick-and-mortar stores - is crucial. Profit is a
completely pragmatic concern, but it's the most important of any product and
Calculating profit is a straightforward equation. The costs associated with
merchandise, including purchasing, storage, shipping and any marketing efforts,
are subtracted from the sale price offered to consumers. If the costs to a
business owner are higher than the sale price, it isn't profitable.
When you look at the price of the product, don't forget to calculate the
direct and indirect costs (like overhead) of selling your goods. If you think
you can sell 50 widgets a day for $1 each and the widget cost you $.50 each, it
may look like you have a profit of $25 per day. But when you learn your overhead
expenses average $20 per day, you may find your profit isn't sufficient even
though sales are good. The best selling products won't ever earn any real money
if your margin is too small.
No matter what a store owner decides to sell, there will inevitably be some
area that requires extra attention. Weighing the pros and cons of ordering,
storage and shipping before making a decision about what to sell will lead to a
higher level of satisfaction and fewer problems with products.
The right product selection powers energetic growth not only of large
companies, but propels small businesses. Sales success requires offering the
right product in the right place at the right time and for the right customer.
If your customers aren't buying, your consideration will be in vain. So first
you need to think about what kind of customer you want, then you'll be able to
determine their needs. Your product selection doesn't have to appeal to all of
the population but it should be something you can convince a large percentage of
shoppers they need. If your products only appeal greatly to some people, it may
not be enough to sustain a business.
Store owners need to do a market analysis on what kind of products cater to
customers as well as how to plan and implement their marketing activities. The
analysis should encompass the competitors and customers. You need to know what
kind of products your competitors offer, for which price and to whom. Besides,
you need to know existing and potential customers about their preferences for
design, function and sizes. Market analysis can be done by conducting
interviews, surveys and studies as well as by using focus groups.
Besides, timing is extremely important. New trends and products can be a
great boost to your business, but you'll need to enter at the beginning of the
product lifecycle in order to be successful. Learning to pick a hot product
before it becomes hot is a valuable skill that comes from knowing your
Let’s take summer sales as an example. With summer being on, many people or
families choose to spend several days at camp, experiencing a totally different
lifestyle. When they go off-grid, a gas refrigerator is an ideal companion to
keep the food and drinks cold and safe. It also could make a perfect RV/caravan
refrigerator during long road trips, switching between electricity and LP gas
and catering to customers’ needs of using propane or generator. In this case,
gas refrigerators can be the right products for your business when you select
items before summer and autumn.
It’s something I would give my dearest friend.
When deciding which products to sell in your store, ask yourself the
following question. Is this product something I would give my dearest friend? If
not, you may want to keep looking. Product quality is extremely important when
your reputation is on the line.
Keep your product offering simple in the beginning. If your product line is
narrow and focused, then your marketing efforts can be just as tightly focused,
which will bring you the best results for your marketing dollars. As your
business grows, so can your product line as long as you keep new products
compatible with the type of business, your location, and your market.
Correct product selection and stock are crucially important for a retailer.
Nobody can offer the customer everything at once, but the available product
selection should provide proper alternatives.