Adding A New Product?

Adding A New Product?

I started my business earlier this year and carry a few great brands. My customers ask all the time if I carry certain brands, which at the time I don’t. I have recently started looking for more brands and products to add to my store and with my customers asking for a few certain brands it seems like the best items to add would be the ones they already want. I would already have my customers wanting to buy these items. And adding these brands would bring in customers looking for these exact products that would not have otherwise looked in my store. It seems like a no brainier to add products that are already being asked for than to add products that are not.

Profit Margins

While I was doing research for my business plan and going over prices to produce the item and the retail price for the item, I noticed these items have very large margins for the companies that currently produce something similar. Most of these products have a 50 percent or higher profit margin. One thing I could do to make my products look better than the competitors is make mine retail cheaper. I could start out selling at a 35 percent margin, prove the business in the market, then I can raise it to 40-45 percent and still have better prices than the competitors. While I wouldn't be making the full potential at first, the lower prices would help get sales and get established as a competitor in the market. 

Celebrity Endorsements

If you see one of your favorite celebrities using a product would you want to try it too. This is one popular way companies market their products. It could be seeing a commercial or seeing them use it in public. You would be more likely to choose that product just to have what they use, or you may think if they use it it must be good.

One Company I think of when I think of celebrity endorsements is Covergirl.  They have commercials on TV all the time with multiple celebrities endorsing them. I have seen them use Ellen DeGeneres, Taylor Swift, Katy Perry, Selena Gomez and many more. With all the adds they do with their celebrities they probably bring in many sales from the celebrity endorsements alone. 

Checkout Line Impulse Buys

I'm sure everyone has noticed how stores place food, drinks, and other items in the checkout lines. They put them there hoping you will be in line and impulsively buy them. Food and drinks when you are hungry, card games that kids beg for while waiting in line, and magazines with the latest news you want to read. All while conveniently placed, most if not all of these items are overpriced. If you were to look in the drink aisle you could find a 2 liter bottle of soda for 99 cents, while a 16oz at the checkout line is $1.50.  That magazine you just had to have would have been free if you signed up to the website online. And the 2 pack of pens you decided to get were just as much as a 4 pack if you checked the pen aisle. While these sales are great for the store, it would be best to check what the cheaper version is of each item elsewhere in the store.