Make More Profits From a Static Product Line
One of the most common merchandising questions from business-to-business (b-to-b) catalogers is how to increase sales (or profits) from static product lines. Often, b-to-b merchandising teams are at the mercy of a manufacturer’s research and development budgets, as well as the timely release of new product introductions.
How can you keep revenues from becoming just as static as the product line? Following are some answers to that question:
1. Modify the packaging.
When the product itself remains constant, change the packaging. For example, try stackable boxes with preprinted labels so that when placed on shelves, the information is easily seen. Perhaps the box lid converts to a display, or when emptied can be used as a storage container.
Some b-to-b catalogers review all the assumptions for the packaging, from the type of plastic used to the hangers, stickers, adhesive strips, labeling and folding tabs. Talk to customers to determine if your packaging potentially can solve their dilemmas. If packaging isn’t worth changing, maybe the merchandise exterior is.
From environmental issues to convenience, identify factors that differentiate the product. Your goal is to satisfy customers’ needs by offering them solutions or presenting a new opportunity through a packaging redesign.
2. Change the price break quantities.
More and more b-to-b catalogers are revisiting the quantity price- break options.
Say you currently offer products at a cost of goods of 45 percent. You sell one item for $100 retail. And you offer a price break, charging $95 if customers buy two to 11 products, and a final price break of $90 each for 12 or more.
Revisit those ranges to try to increase purchases and overall gross margin dollars. Thus, you may find it’s best to charge $100 for one to three, $97 for four to six, $95 for seven to 11 and $90 for 12 or more.