7 ways to ensure your product is profitable.
Why focus on increasing your sales if your product isn’t profitable?
As a fashion consultant to micro fashion brands, I encourage clients to focus on improving their product profitability first before investing time and effort in increasing their sales. This way every increased sale will drive even more profit therefore making this a win win process!
These 7 methods are applicable for brands that are about to launch a product as well as, for brands that have already launched and are looking for ways to improve their product profitability.
Ensure there is demand for your product.
The MOST important lesson I am going to teach you today is to validate your idea to ensure there is a demand for it before investing a dollar more!
- Spend 10K on developing a skincare range because it’s similar to Clinique?
- Produce a women’s dresses range because it’s pretty?
- Create a collection based on the ’70s because your mum told you to?
I’m pretty sure the answer would be no! So why rush into producing a product without running the checks first.
This method should be used every time you produce a new product as this method will teach you how to check the search demand for your product type by looking at the biggest search engines that being; Google, YouTube, Amazon.
What you’re looking for are a high search volume and low competition.
Tools I recommend you use are:
For example, if your product is swimwear, you’ll find that search term is too broad, therefore you should try searching for plus size swimwear or swimwear made in Australia or 100% sustainable swimwear etc and a reminder you’re looking to verify that there is a search demand for your product.
As a result, you will have found your active audience that is ready to buy the product that you’re going to produce and you will understand how many units to produce based on that demand.
Don't fixate on the detail.
If you’re an eCommerce brand or the majority of your sales come from eCommerce, then this point is major!
*NEWS FLASH* your audience will buy your product based on a photo if they are lucky a catwalk video. They won’t have the privilege’s of touching or seeing your product till it’s bought, so remove the bells and whistles and the added design detail and focus on delivering a quality made product based on the MVP.
This is a proven way to increase your profitability at the design stage, saving on production costs and ensuring you can sell it at a competitive, appealing price point.
Know who your audience is.
This is critical to your product profitability in so many ways, because if you don’t know who they are how can you:
- Design a product to meets their hopes and desires?
- Produce the right size range, based on their ergonomics?
- Know what sales channel/s they prefer to shop on? Instagram, multi-brand platforms, department stores etc
- Price your product to suit their demographics?
- Use the right tone of voice in your marketing campaigns?
If you ensure you answer all of the above points, your product will sell itself based on its the perfect position in the market for your target audience.
To learn more about who your target audience is complete this DIY form.
Complete a competitor pricing analysis.
Pricing equals profit right? So this is a straight forward formula to conquer!
You must ensure your price points are competitive for your product type and market, whilst being profitable. To learn how to achieve this follow these detailed instructions.
Your product imagery and pricing are the first things your audience see when you’re trying to make a sale. Therefore the right price will either alienate or entice your audience, making it extremely important that your price your product accurately to suit their wallet (& yours!).
Tip: avoid printing pricing on your labels so that if you get the price wrong, you can easily amend it without having to re-label your stock.
"Your product imagery and pricing are the first things your audience see when you’re trying to make a sale. Therefore the right price will either alienate or entice your audience, making it extremely important that your price your product accurately to suit their wallet (& yours!)"
Launch on time everytime!
You will have bought your product based on its demand and lifecycle i.e. how many weeks you plan to sell it for. Therefore even if you launch 1 week late, you’re already affecting your profitability because you’ve got less time left to sell your product.
A secondary factor of being late can also be that you’re letting down your eagerly awaiting audience, by not launching the product that you’ve been hyping on on Instagram or Facebooks ads. Therefore disappointing them as well as wasting your marketing efforts.
Launch on the right channel, in the right market where your audience shops.
You may have always had aspirations to sell to Harrods in the UK or to Amazon globally. But ask yourself; does your target audience shop on that channel?
To increase your profitability you need to find the channel/s that your audience love to use and be present on them, making more noise than your competitors!
If you ensure you pick the right channel where your audience is, this is also a demographics check, therefore increasing your likelihood of making more sales to the right wallet size, whilst remaining relevant and relatable.
Tip – You may get approached by newly launched marketplaces offering you an amazing deal in which to sell your product on their site. Don’t be leered in by their offer, first ensure that your audience shops before wasting your time on a pointless deal.
Triple check the quality of your product!
The higher your product returns the lower your profitability – simple!
Focus ALL your efforts on ensuring you choose trustworthy manufacturing for your product, that produces your collection with 99% precision. Ensure you design a product that focuses on the needs of your audience ie comfort or fit and ensure your source and use quality material that doesn’t fall apart.
Every product return you face will eat away at your profit because you will have to run QC checks upon return, pay to re-sell it again ie shipping and marketing costs. Therefore you want to work hard to ensure that every sale you make remain a sale!
Ensure excellent customer service.
Delight, dazzle and surprise your customers, making them feel like the most important person in the world! Consider:
- If their shipment is late offering them a free gift.
- If they return an item due to an issue, offer them a % off their next order.
- Handwriting notes and personalizing their delivery experience.
The goal is to increase each customer profitability, but retaining them. by turning their cost acquisition into repeat purchases.
Ways to do this is to ensure you have a solid EDM welcome sequence alongside amazing customer service.