If you're in any type of retail business, either B2C or B2B, and you sell multiple items it makes sense to pay attention to merchandising. This may also apply if you're in a service business with multiple services.
It probably stands to reason that you sell some items that have a higher markup than others. If you go to a shoe store, you'll notice they sell all kinds of accessories. The markup on accessories can be as much as 10 times that of the shoes. If you buy a $50 pair of shoes, the markup may be $12.50. Then you buy $25 worth of socks at the same store - the markup may be $20.
One way to increase overall profit in a business is to increase the average amount of each transaction. A great way to do that is to create packages of items. Let's say we're at our fictitious shoe store. We might create a package where you get a discount off a pair of socks and some shoe polish when you buy a pair of shoes.
It stands to reason that customers would be more likely to purchase the socks and polish because of the perceived discount, and the ability to justify the purchase.
Here are some keys to creating successful packages:
- Package higher markup items with lower markup items to decrease the overall profit loss from the discount.
- Create logical packages. Pairing a golf bag with a tennis racquet probably won't make sense to the customer.
- Promote the packages as unique selling points. Put together something that your competitor don't offer.
Look at creative ways to increase your customer's perceived value.
J D Moore - Marketing Comet