From the course: Selling into Industries: Retail and Consumer Products

The product: Pricing, packaging, and terms

From the course: Selling into Industries: Retail and Consumer Products

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The product: Pricing, packaging, and terms

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- You're really excited, and truly believe you've got a great new consumer product. Your research about the marketplace is making you feel optimistic. The team of marketers, product developers, key players from other departments, along with the sales staff, is collaborating like never before. Now you're about to come to the hurdles, that have stalled or crippled many a consumer product launch. I'm talking about the decisions of what could be the suggested retail price, the SRP. How should we package for the greatest shelf and online appeal, and what are the correct selling and promotional terms to get retailers to stock it? Let's look at each with some key points to bear in mind. Pricing; the SRP will be close to your competitors, unless your product is significantly better, and you can price it higher. Setting the most aggressive price that generates the best sell-through is the goal, so you can make the healthiest profit margin. Pricing is always dictated by what the consumer is willing to pay. Your finance manager needs to be included right from the start, so there are no surprises. Packaging; your packaging is your selling method on the shelf or on the webpage, so visual appeal is essential. Evaluating various designs, using focus groups to get feedback, and doing in-store tests when possible, are valuable techniques to use. Your packaging also needs to be manufactured cost effectively. Terms and conditions of sale; this is your official document with details of how you'll be selling, shipping, and invoicing your product, for the retailers you're working with. The document may also include wording about the replacement of damaged goods, short shipments, availability of sell-through data, and other legal matters needing to be noted. The discount you provide to retailers will be an important aspect of this document, along with who pays the shipping cost to their stores or warehouse. How long does the retailer have to pay their invoice? Your lawyer needs to help prepare this document so that retailing laws are observed, and no account receives preferential treatment. Pricing and packaging are subjects that are so important, that there are courses specifically on these topics. You can search this library, as there are many sources to get a more thorough understanding. Pricing your product intelligently, packaging it with maximum consumer appeal, and providing it to accounts at terms profitable for everyone are essential steps in retail selling. Not everyone will agree as you work through this, but devoting the extra time, and getting input from all key team members, is the right course of action, and will increase your odds for success.

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