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Following are factors to keep in mind as you assemble your
basic merchandise assortment:
The Retail Ecommerce Company Store is primarily a marketing
operation designed to enhance relationships with your constituency
and to build visibility in the marketplace. Naturally, "will
it sell?" is a basic question. But it is not the first
question to ask when selecting products for the retail market.
Nor is it the most important one. Just as in the medical profession,
your philosophy must be "first, do no harm".
- So, the number one question is "does this item fit
with the organization's image and mission?"
- The second question is "does it have sufficient quality?".
Only after dealing with those two matters should you evaluate
whether a product will sell.
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Let
your graphics watchdog office provide guidance to your product
development efforts. Especially important - before you authorize
a production run, have the logo applied to a pre- production sample
(prototype) and ask the watchdog to review it.  |
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appropriate product with lasting quality is likely to be far less
costly than indifference or disappointment generated by an inferior
or inappropriate one. Consequently, an organization's brand should
NEVER be used on a product if there is risk that the imprint,
the product or the product's appeal will not endure. |
In a Retail Company Store online sales should
average at least $25-30 to cover the cost of inventory management,
markdowns, order processing, customer service, overhead and
the pick, pack and ship process. Protect your margin two ways.
• First, have most of your product line priced at or
above that average sale target.
• Second, merchandise products below that price point
in a manner that encourages multiple sales. For example, if
you sell T-shirts at $18 and margin permits, you might offer
two for $30 or $32. Or offer to toss in a CD for $8.00 with
the purchase of a T-shirt.
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Inventory decisions
for the Extranet Company Store/Supply Depot should reflect the
specific needs of the organization's marketing activities. Each
product you consider must answer questions similar to these: "do
we use enough of this current product to justify continuation?"...
"is this version of the product more appropriate?"..."what
people, departments, offices, etc., in the organization might
use this potential new product?"..."is our array of
imprinted give-away items inexpensive enough to encourage wide
distribution?"
The point is - you're not the one to answer these questions. Authoritative
answers must also come through collaboration from the user groups
within your organization. And so will the pressure from others
to do things their way. (Click
here for
comments about organizational politics and product selection.) |
| Important Caution: It
is usually a bad practice to buy inventory because you like it.
That's a beginner's mistake. You are not the store's customer.
Your unsupported personal preference is insufficient justification
for inventory investment! Your best bet - put personal preferences
aside, buy what you think your market will like, mark it down
aggressively if it fails to sell, reorder cautiously if it does
sell - and stay emotionally indifferent the merchandise. |
Customers of both Retail Company Stores and
Extranet Company Stores will compare product features and product
prices as they shop. To fill any product category you should
try to establish price points - perhaps five or six, each priced
10-15% more or less than the adjacent one. Select products whose
prices distribute within this range in a bell curve, with the
largest concentration of products in the middle.
Naturally, you will try to offer value by pricing your products
realistically. But note that in the Retail Company Store the
application of your organization's brand is an embellishment
that increases value and can justify a bump in the selling price.
So when you are setting prices to fit into a range, you can
often mark up a few extra points to get to the next price point.
The last mentioned merchandising practice is not a great idea
for the Extranet Company Store because your organization is
actually your customer. In that store a range of price points
may be less critical to the selection of products, anyway. Your
basic inventory should cover the organization's basic/common
applications regardless of price - and whatever that means will
have to be learned from the in-house market. Fortunately, you'll
receive some guidance from the track record of products already
in use. You'll also be over-guided by partisan colleagues urging
you to include in the merchandise assortment products that represent
their personal preferences or their departments interests. (Click
here for comments about the subtext of organizational politics.) |
There
are no hard and fast rules about size-assortment in ready to
wear. But there is a trend toward larger body sizes. We discourage
clients from selling adult size small and are cautious about
medium. The bulk of your inventory - 75-80% - should be in unisex
sizes large and XL and/or their female equivalent. There is
a little-noted and increasing demand for size XXL.
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| In
a Retail Company Store online sales should average at least $25-30
to cover expenses. |
Both kinds of Company Store carry products that
feature the company's brands and other identity marks. Select
plenty of logoware for your store to carry. But don't let that
emphasis be a barrier to your thinking! When building a merchandise
line, look beyond logoware to other product categories. An especially
important one is books, DVDs and other materials about your organization's
focus. You'll sell some. But more important, you will be helping
define your organization as an authoritative source for information
on that topic - and that's a powerful way to enhance reputation! |
When selecting the basic inventory,
there are a million ways to cut costs and every one of them
risks quality - a risk your store can't afford to take. Face
the fact that the inexpensive T-shirt soon ends up as a car
wash rag and the low-ball mug soon hides in the back of the
shelf. Buying the lower end of the price range can be the most
destructive way to cut inventory cost. Instead of making this
mistake, control your inventory cost by investing in a smaller
product line.
Want more? This
link will open up a page in the website of VisABILITY, our
product development company. It will give you a short summary
about the kinds of product development approaches that can be
taken to meet specific challenges. While staple goods should
be the bulk of your basic merchandise assortment, when the time
comes to develop custom products - this information will be
helpful. |
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