For retail, use the strategy of 4 Ps
If a nonprofit wants to offer retail goods as part of its fundraising, it is not just a case of finding some schlock and putting a price tag on it.
During the 2013 Blackbaud Conference for Nonprofits, Laura Beussman and Jonathon Leeke of Altru said that success with retail merchandise requires paying attention to the four P’s: price, promotion, place and product.
- Price. If they could, Beussman and Leeke would have Bart Simpson write 100 times on the board: “Price is not based on cost.” It is based on the market (the price of similar goods sold by competitors), cost + a certain dollar or margin percentage, and value, as perceived by the customer.
- Promotion. Promote excess inventory, high margin percentage items, items with high elasticity (relatively high percentage change in quantity for a percentage of change in price), new items and seasonal items.
- Place. Shoppers like merchandise that is above knee level. They also love touch, mirrors (they can’t pass one without looking), talking and recognition. Attention paid to customers by sales help has been shown to increase sales. Talking about a produce increases its chance of being sold.
- Product. Get to know the customers, find what appeals to them, watch what sells, make adjustments.