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And what happens? Te new products die young because they are over-priced.
All the merchant’s efforts to develop a new, exclusive product are defeated by an effort to improve overall company performance instead of letting individual products shine.
Te correct path is once the product has proven it can be a best-seller, then focus efforts on getting efficient with cost control/redesign for better margins. But of course, that’s hard work, and the merchant is under constant pressure to find/develop more new products.
It becomes a vicious cycle where competition requires you to constantly cut costs and be vulnerable to other market forces. As one reader recently lamented “Most of the current retail disasters started 40 years ago with outsourcing offshore. If you buy or manufacture your goods locally, then you don’t need to order a year in advance, and you can manage quantities better. Once you have long supply chains you are very vulnerable. Napoleon found this out, and see what happened to him.”
How does a merchant stay motivated? What can overcome the lament? One merchant recently shared with me that during his career, his ultimate goal was to develop “Legendary Products”. His criteria for a legendary product were simple – it defines the brand,
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nobody else has it, customers simply love it and it sells year after year after year after year.
Oh, and it has a fantastic margin while selling for less than half the company’s average order. As my friend Frank Oliver used to refer to them, they become a “Shameless Mail Order Runner” – meaning a product that goes in every book because it is so good.
Legendary products are the result of hard work, not ego driven or vendor induced introductions. Tey involve knowing the customer and the customer’s needs. Te merchant that shared this information with me developed many such products during their career.
As most of you know, I’m a history buff. When the historian David McCullough died in August, I watched several interviews with him on YouTube. One of his laments was that the average American high school and college student don’t know basic American history. He did not blame the students, but the teachers. Instead of studying “education”, he felt it was more important for them to study a specific subject – such as math, history or biology. Learning how to teach would come later.
His point was that only by being a master of these – and other – subjects could the teacher have the love
for and the enthusiasm for teaching it to students. CONTINUES OVERLEAF >
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