Ever wonder why some products sells higher than others? Does it make sense to buy the more expensive ones with the perceived notion that its because of quality that is why they cost more?
This may hold true in some cases but the secret lies in the brand identity and the package that can give rise to companies to ask for better premium on their pricing.
In my years of working for some major retailers, I learned that quality is important but the real driver for a companies growth is their willingness to spend on developing their brands and invest on the packaging. One company I've worked for develops and imports beauty products, though we can simply import as what the factories would be churning out but we know we can only mark-up those products so much, so eventually we have to conceptualize our own brand name, repackage the products and in this way we are able to mark up our products at a comfortable margin profit.
In one instance I was visiting a factory in China and I was surprised at what the manufacturing company has been producing, quality, sturdy toy merchandise from childrens gift sets to cookware to educational toys and dolls. Knowing the price all the more surprised me as these are so low-priced that I had this idea of wanting to purchase and sell at a higher margin and yet with the kind of packaging the manufacturer is churning out their factory, I don't think it will give us much premium for pricing it higher.
I then came to the factory owner and discussed options on how to improve their packaging, I submitted several possible brand names I would like these to be produced for us exclusively. After five months of package development, we finally had our first repackage-re-branded products in our store-shelves and it was a hefty margin we have put into these products, with not much fanfare or local advertising, we had these sold like hotcakes. It boosted our store facade, we gained new customer followings and what is important, we have consistently grew our sales year on year.
Understanding what will tickle the consumer, and seeing a beautifully packaged products in your store shelves will entice buyers to take out those precious pocket to spend on a well developed products. Initially it doesn't cost much so long as you have a quality-produced merchandise, but in the long term that investment will even raked in a hefty profit with a very good margin not to mention the brand loyalty it will reaped for your company.
On another point, the mere conceptualizing of a brand must also come with a long term vision, it must not be just sheer personal bias and instinct. I met an importer and he came to me to ask how come, the recently produced product I managed to put on the shelves sells more, while his company does the same, I told him to show me his brand, and I when I had seen the brand, I asked him, who gave the brand name, he said, He came up with the name, I asked him, where he got the name for the products, he mentioned to me that its his wife's name.
I have to honestly advice him that the name does not connote any class to have it as a product brand, he was startled and angrily said, that it does not have anything to do with the name of his wife and explained alot of his take why that brand name should remain and even to some extent tell me that his wife has class.
It was funny but I wasn't telling him his wife doesn't have class. You see even if one has so much money to squander on a trial and error, one must never take things to an emotional level and be sentimental about it.
I bumped into the same businessman several years later in a Canton Fair, and while we were having lunch together, he told me that he should have listened to my advice several years ago, he has shelved his "wife's brand of merchandise" since he loss a lot of money and not being able to sell the voluminous inventories of the "brand" he so wanted. This time I was more wary to comment, so I just kept mum about it and just listened to what he has to say.
This may hold true in some cases but the secret lies in the brand identity and the package that can give rise to companies to ask for better premium on their pricing.
In my years of working for some major retailers, I learned that quality is important but the real driver for a companies growth is their willingness to spend on developing their brands and invest on the packaging. One company I've worked for develops and imports beauty products, though we can simply import as what the factories would be churning out but we know we can only mark-up those products so much, so eventually we have to conceptualize our own brand name, repackage the products and in this way we are able to mark up our products at a comfortable margin profit.
In one instance I was visiting a factory in China and I was surprised at what the manufacturing company has been producing, quality, sturdy toy merchandise from childrens gift sets to cookware to educational toys and dolls. Knowing the price all the more surprised me as these are so low-priced that I had this idea of wanting to purchase and sell at a higher margin and yet with the kind of packaging the manufacturer is churning out their factory, I don't think it will give us much premium for pricing it higher.
I then came to the factory owner and discussed options on how to improve their packaging, I submitted several possible brand names I would like these to be produced for us exclusively. After five months of package development, we finally had our first repackage-re-branded products in our store-shelves and it was a hefty margin we have put into these products, with not much fanfare or local advertising, we had these sold like hotcakes. It boosted our store facade, we gained new customer followings and what is important, we have consistently grew our sales year on year.
Understanding what will tickle the consumer, and seeing a beautifully packaged products in your store shelves will entice buyers to take out those precious pocket to spend on a well developed products. Initially it doesn't cost much so long as you have a quality-produced merchandise, but in the long term that investment will even raked in a hefty profit with a very good margin not to mention the brand loyalty it will reaped for your company.
On another point, the mere conceptualizing of a brand must also come with a long term vision, it must not be just sheer personal bias and instinct. I met an importer and he came to me to ask how come, the recently produced product I managed to put on the shelves sells more, while his company does the same, I told him to show me his brand, and I when I had seen the brand, I asked him, who gave the brand name, he said, He came up with the name, I asked him, where he got the name for the products, he mentioned to me that its his wife's name.
I have to honestly advice him that the name does not connote any class to have it as a product brand, he was startled and angrily said, that it does not have anything to do with the name of his wife and explained alot of his take why that brand name should remain and even to some extent tell me that his wife has class.
It was funny but I wasn't telling him his wife doesn't have class. You see even if one has so much money to squander on a trial and error, one must never take things to an emotional level and be sentimental about it.
I bumped into the same businessman several years later in a Canton Fair, and while we were having lunch together, he told me that he should have listened to my advice several years ago, he has shelved his "wife's brand of merchandise" since he loss a lot of money and not being able to sell the voluminous inventories of the "brand" he so wanted. This time I was more wary to comment, so I just kept mum about it and just listened to what he has to say.
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