Established retailers have a habit of keeping their cards close to their chest, claiming that their success is down to simply having a “good eye” for products that will sell. But business can’t be all about guesswork, because you’re inevitably going to get it wrong at some point.
The potential cost of misjudging the market is far higher for small businesses than it is for retail giants. It’s important to have a step-by-step process when it comes to choosing your products and suppliers.
In this article, Stephen Balmer-Walters is the Founder and CEO 8RC, lets Company Bug readers in on his tried-and-tested methodology for buying products correctly. This includes both small and large retailers.
If your end-users aren’t constantly on your mind when you’re choosing products to sell or new suppliers to work with, you haven’t got your priorities right. Customers should be at the forefront of every decision you make in business. When eyeing up potential stock, ask yourself:
- Who is my end user?
- What do they want?
- What do they already have?
- How is this the solution?
This is particularly important in small business, where there is a closer proximity between you and your customers. In fact, many people choose smaller retailers over big brands because of this extra attention to their needs.
Best in class
You may not be able to compete with household name businesses on visibility and brand recognition, but you can definitely offer customers a better product. The emphasis for small retailers should be on quality over quantity: a higher-value and more exclusive product that gets the job done instead of a mass-produced option that’s simply convenient.
When considering new products, you need to be especially discerning. Remember to test the product for yourself and ask detailed questions about its ingredients or components. This also gives you in-depth product knowledge that you can use during the sales process.
The right look and feel
Presentation truly is everything. Your product could theoretically tick every single box in the list of customer needs, but it won’t sell if it doesn’t look good in store. This applies to both packaging and merchandising.
The secret to getting the presentation right? Emotion. Today’s customers are highly visual and sensory creatures that buy products they feel attached to or fit their lifestyle and values. Create a buying environment that evokes a particular feeling relevant to your brand. The product might make your customer feel:
… and so much more!
The maths of it all
In our experience, most small retailers are creatives at heart. But, by definition, they also need to be business people. The process of selecting new products to sell can be a lot of fun, but at some point, it’s time to crunch the numbers.
We’re big believers that profit isn’t the be-all and end-all of business, and small businesses certainly can’t expect it to happen overnight. That doesn’t mean retail entrepreneurs shouldn’t calculate their potential return on investment. It’s important to be realistic: don’t base your figures on the best-case scenario.
Ultimately, choosing new products for your retail business is both a science and an art. Smaller operations have fewer resources and therefore have much more to lose from making the wrong decision. Backing yourself up with procedure and expertise will minimise the risk of error and maximise the possibility of turning a profit from your latest product line.
More on developing a product and carrying out market research.
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