Picking a Product

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Avoid this 'Red Flag' When Picking a Product

Dear Friend,

Last week I got back from the SPREE convention in Boston.

For those of you that are new to my newsletter, SPREE stands for the Specialty Retail Entrepreneur Expo and Conference......

  ....otherwise known as 'THE' Show for Cart and Kiosk Entrepreneurs.

For those of you that WANTED to attend but weren't able, there will be another one coming up at the end of July in Long Beach, California.....but more on THAT later.

One of the most interesting elements of the show was the exhibit hall FULL of prospective cart and kiosk products.

At the show, I got a chance to talk with the product editor of the Specialty Retail Report magazine. One of her assignments was to choose her top five 'Hot Product Picks' from the products exhibited at the show - and write an article about them.

The next day I thought I would ask as many people as I could which THEY thought were the best picks from the show.
I got a DIFFERENT answer from just about every person I talked to.

Quite a contrast from last year's show....

Last year, when I asked leasing managers about their 'top picks'....

  .....almost every one picked the SAME TWO products as their best product picks of the show.

At first glance, BOTH products looked like they would have been great sellers. And both probably WOULD have been. But only ONE of those two products made MY list.

The OTHER product was one of the LAST products  that I would have chosen to sell......

  ....even though I think it WOULD have sold well.

Picking this product would have been a huge mistake in my estimation. This product had a HUGE 'red flag' associated with it.....it's a 'red flag' you should know to look for.

You see, one of the KEY questions that you want to ask about when picking a cart or kiosk product is about the MARGINS of the product.

The margin refers to the PERCENTAGE of the RETAIL price that you pay for your cost of goods sold at WHOLESALE.

Let me give you an example.....

Suppose you are selling a product for $20 on your cart or kiosk, and it costs you $6 at wholesale.

In this case the margin would be 30%.

$6  /  $20  = 30 %

Your wholesale cost would be 30% - in this case $6 - of the $20 price your customers pay you.

Standard retailers often work with what is called a 'keystone' margin....or a 50% margin.

DISCOUNT retailers, like Wal-Mart and Target will sometimes lower their prices so their margin as much as 80%....they might pay $16 for a $20 item.

The reality is that if you have to pay 'keystone'....or more...for your product cost, it is can be difficult to be profitable in most carts or kiosks.

Many profitable CART products have margins of better than 35%. And it's not unusual to find profitable cart or kiosk products with margins of 30%, 25%, 20% or better!

The key is that you will have enough AFTER paying for your expenses to have a healthy profit left over....

Anyway, back to the situation I was telling you about....

One of the two products in question had a margin of almost 50%.....

  .....meaning you would have had to pay almost $10 for a product you would sell for $20

You would have had to sell a TON of product to make money with these margins. That product line would have cost TOO MUCH at wholesale to make money on a cart or kiosk.

Before you choose a product to sell on your cart or kiosk....

  ....be sure that the MARGIN on that product is healthy enough that you will be able to turn a profit!

If you missed the SPREE show, but are looking for a product to sell on a cart or kiosk, subscribe to the Specialty Retail Report magazine.

It is one of the best sources available for finding profitable cart and kiosk products and concepts.

Subscribe here:


Be profitable!

Brady Flower

P.S. You can get that copy by subscribing at:


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