Fall 2010 Picking Profitable Product
With hundreds of options in the marketplace, how do you pick what will sell best in your cart or kiosk? Here are some strategies that will help you pick a winner.
You may already have an existing cart or kiosk or maybe you are thinking of opening one. There are many factors that help make a successful cart or kiosk business. You will need a solid business plan, professional employees, and outstanding visuals. But even if you have all of these steps covered the bottom line is that you won’t get far without a good product or product mix that will sell.
The cart and kiosk programs in malls was originally developed to have vendors sell unique items on carts—ones that could not be found in the local stores. Over the years specialty retail programs have evolved. In malls today it is all but guaranteed specialty leasing programs will have operators selling cellular service and accessories, sunglasses, and handbags. When looking for a product to sell, try and find one that is brand new to the market or unique to a mall.
You will need to decide if you want your cart to have only one product or multiple ones that complement each other. Consider selling a product that you know and are passionate about. For example, don’t sell licensed sports products if you have no interest in sports. You want to be very knowledgeable about your product and to be able to interact with customers to make the sale.
Make sure that the product you sell is good quality and approved to be sold in the United States. There are many products out there that are knockoffs and are illegal to sell here. Do your homework and ensure that your product is legal. Also, ask the manufacturer for a list of other operators or stores selling the product in your region. This will help you determine if the product is already oversaturated in the market.
If you have your heart set on a specific center, make sure you pick a product that is not already sold in that center. Even within a center, a certain type of product might sell better at one location over another. For example, a cart selling novelty plush might enjoy greater success close to a childcare drop-off area in the mall. Assess your mall’s location, foot traffic and demographics to determine the best product for your business.
Don’t confuse the customer
Now if you decide on more than one product, how many is too many? One rule of thumb is to ensure the product quantity and visuals do not overwhelm the customer. You typically have five seconds to catch customers’ attention and one minute or less to tell them about or demonstrate your product. Shoppers today are busy and price conscious. You should have a product line that is easy to understand and has a common theme.
Albert Sorto, President of Specialty Retail Solutions LLC, who has owned and operated his own cart and now consults with manufacturers and operators on how to have a successful cart or kiosk business, has this advice: “If an operator carries more than one product, they should make sure variety is provided as a way to offer different price points.”
Where to find product
There are many avenues to take to locate the right product for your cart or kiosk. Tradeshows, magazines, and the Internet are all great resources. The Retail Resource Guide (retailresourceguide.net) has many listings for products appropriate for carts and kiosks. SPREE, the annual tradeshow hosted by Specialty Retail Report, is meant specifically for the cart and kiosk industry and features hundreds of turnkey concepts every year.
Tradeshows have different entry requirements, so be sure to check out the website for these requirements ahead of time. Here are some of the common documents many of them require: U.S. issued photo I.D., federal tax number certificate, state resale tax number certificate, business card, and business license. When you attend these shows you will want to be sure to visit both the temporary and permanent exhibitors. You also want to ensure that the exhibitor is set up to handle shipping and inventory loads that meet your needs.
It is very important that you do your research and ensure that the supplier you have chosen meets all the requirements set forth by the Federal Trade Commission. Your local Small Business Development Center is a great resource for you to determine if your product and small business meet federal, state, and local requirements. Visit sba.gov for locations.
Once you have determined your product(s) you will need to establish the pricing. Many manufacturers and distributors will have a manufacturer suggested retail price (MSRP). However, this price is not firm. Visit your competitors in the market and see what price they are selling a similar product for. You also want to make sure that your price point is a good fit for the mall that you are in. Try and have a 400% mark up from the wholesale price to cover your expenses and still make a profit.
Carts that have a common themed product lineup, effectively brand their business, and use good visual merchandising, have the most successful sales. In short, do your homework. Know your product and create a good experience for the customer to ensure repeat business.
Starr Cumming is an Atlanta-based freelance writer and independent contractor with 13 years of experience in the specialty leasing and commercial real estate industry. She can be reached at firstname.lastname@example.org.
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