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How To Get your Products Ready to Sell at Retail with my Four Ps of Retail Distribution
Whether you're selling pacifiers or craft kits you want a product that clearly meets one of these two criteria:
Essential or Unique
creating a product that is essential to a phase of life: pacifier, baby bathtub, ABC flash cards? Or are you creating a product that is unique and novel? If you're creating a novelty item, then you should make sure that it's the best, most innovative, one-of-a-kind novelty item that captures attention at first glance.
Regardless of your type of product you'll want to address...
In my gift shop we use
, which is a 100% markup from the cost of the item that I bought it for from the brand (cost of goods sold or COGS) and 50% of the sale price. To get your keystone pricing keystone pricing at retail you multiply the wholesale price by 2 to determine the price you'll sell it for on the store shelves. Keystone Pricing Example
Tutu cost to make: $7
Tutu cost to retailer: $14 (2 x $7)
Tutu cost to consumer: $28 (2 x $14)
There are many different theories about pricing strategy. Two important considerations are whether you're interested in a value/volume play or can opt for a better pricing to create a premium product.
Depending on where you're sourcing and producing your product will help determine your pricing and market strategy. I produce 1/2 of my collection in Seattle and the other half overseas. Unfortunately, in order to produce apparel that was priced competitively for both wholesale and retail consumers, I had to move production overseas.
Thankfully, I'm working with some new production facilities in Seattle that are working to create a
healthy sewn goods manufacturing community in our area to make pricing more competitive. So far, I've been pleased with the results.
You'll have to do some market research on your category pricing and determine what competitors are doing in your space. You can go another route entirely and jump on the
Blue Ocean Strategy train. This is a superb and practical theory to create new markets outside of the status quo. Blue Ocean strategist innovate to jump frog competitors and the pricing pain that typically exists in any vertical.
Once you set a fair and marketable price, you'll want to turn full attention to your retail...
I cannot stress this branding tool enough. Work to create a packaged product that will jump off the shelves or
At retail, I LOVE things that can be stacked, hung, artfully angled and positioned so I can layer them in my merchandising. Adding calls to action and descriptions on every surface, but keeping the look clean will serve you well.
Depending on your initial retail distribution strategy, you may want to invest in
bar coding your products, which will set you up to work with larger specialty retailers, small chains and eventually mass merchants.
Bar coding does not have to be complicated. While a bit of a financial investment with GS1, the international bar code management company, it's then easy to print your bar codes from your desktop printer using
Avery Permanent Labels. Click here to start the bar code process.
If you're producing children's products, you'll want to make sure your items are batch marked with a code, often numeric such as the month and year it was produced, in case you ever needed to recall products.
For any product launch, you'll want to investigate requirements of the
Consumer Product Safety Commission.
Now that you've got some sweet products that are fairly price and perfectly packaged, it's time to look to...
As a small shop owner, I fall into the boutique category of retailing, but here is a look at the spectrum of retailing that you can consider to crack. There is no best target when you're starting out if you're bootstrapping or using small investments. So go easy on yourself and be sure to test your product, get feedback, adjust as necessary and have fun!
Retail Distribution Target Spectrum
Farmer's/Craft Markets - usually run by a non-profit organization or community council
Boutique - Satsuma Kids Shop
Co-op - cooperative of vendors selling in one/multiple locations
Specialty chains - J.Crew, Dick's Sporting Goods
Department stores - Nordstrom, Von Maur
Warehouse stores - Costco, Sam's Club
Mass merchant stores - Walmart, Target
I will tackle each category in more detail in separate posts. I invite you to
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