INDEPENDENT RETAILER magazine is now the official news outlet for Wholesale Central visitors.
Each monthly issue is packed with new product ideas, supplier profiles, retailing news, and
business strategies to help you succeed.
See new articles daily online at IndependentRetailer.com.
Oct 1, 2009
Tailored for the season or not, swift sales in the coming months become vital to overall success. Personalized ornaments fill the seasonal bill, while unique product offerings give kiosk and cart vendors a holiday peak, and can plant the seeds for business to come throughout the year.
Remote Control Hobbies in Beaumont, TX, which supplies higher end remote control vehicles, occupies a unique product area that keeps business brisk all year long. Calliope Designs Inc., in Santa Rosa, CA, brings personalization to holiday product options with handmade ornaments, which vendors give to each buyer as a touch of individuality.
Remote control vehicles are a hot category, but Cheri Mitchell, owner of Remote Control Hobbies, says, "Vendors need to understand the difference between high end hobby vehicles and inexpensive throwaway units. During this economic downturn, people are turning to hobbies that provide family activities," she says. The key to developing year round business and higher profits with this category lies in the aftermarket associated with hobby related remote control vehicles, according to Mitchell. "We carry thousands of stock keeping units, including a large assortment of helicopters, airplanes, cars, trucks and boats, along with numerous products that both add to the initial sale and also keep customers coming back."
The initial products are, "ready to run," she explains, "Because people like instant gratification. But the real profit is in the accessory and aftermarket units." Helicopters crash, for example, calling for extra tail blades. And the battery packs included with the initial sale take as much as 12 hours to charge. "People don't want to wait," Mitchell points out. Therefore, "Vendors can upsell to a higher end charging unit that adds to the initial sale." She offers the company's Rock Crawler as an example. The ready to run unit wholesales in the range of $150 and has a suggested retail of $225. "Add to that a battery pack that provides extra running time and a quick charger," she suggests. The extra battery pack wholesales for $20 and retails for $30. The quick charger wholesales for about $20 and retails for about $50.
"Everybody wants helicopters," Mitchell points out. "But they are hard to fly, and when they crash, which is inevitable, there's need for hobby quality replacement parts that provide additional profits for the vendor." Her company works one on one with kiosk and cart vendors to arrive at a mix of RC vehicles that meet a particular market's demographics in terms of age and price appeal. The staff then helps the vendor assemble a mix of accessory products that suit the RC selection. "Best sellers vary according to local demographics," she explains.
"In general, depending on the product choices, a kiosk needs a minimum opening order of between $500 and $1,000," Mitchell suggests. "It can be a mix of different units, but should include at least one each of 10 different units, so the consumer has a choice." The return on investment, she maintains, "can be 50 percent. We not only provide product support, but also merchandising and marketing support. We begin by teaching vendors how to sell the products," she says. The number one strategy is, "Play with the product. Let the customer see and touch it, and demonstrate how it works. In that way, the vendor understands the products and can engage customers in the hobby related conversation."
Remote Control Hobbies can supply a video of vehicles in action, which the vendor can run as a loop on a video screen. It will also provide display ideas and direct vendors to an online banner company that can create winning signage. "We encourage vendors from the start to promote aftermarket service," she says. "Consumers can send units to us for repair, and the vendor makes a percent of the repair costs, including parts and labor. We also tell vendors how to collect customers' email addresses. The vendor can put together a contest box, a give away promotion in which customers and prospects drop their name and email address. The vendor then has permission to promote via email."
The company's least expensive RC model is a micro helicopter that wholesales for $20 and has a suggested retail of $45. "You can fly three of these at a time," says Mitchell. "We recommend that vendors tell customers that if they buy three, they get replacement parts for free. They can even simply offer free AA battery packs. These accessories also make great stocking stuffers," she adds. While many of Remote Control Hobbies' kiosk vendors operate year round, there are others that operate just for the final quarter of the year. "We set those vendors up with an account with us. That allows the vendor to communicate with the customer and build rapport for the following year," she explains. "We also send that vendor coupons, which he can use to promote business when the cart goes back into the business later."
Personalized products have become so popular, they've been given the name, "egonomics," by Findgift.com, an online gift giving search engine. More than half of the site's top 20 products offer some type of personalization. "A personalized gift not only pleases the recipient, it also makes the giver shine as well," said June Mauser, the search engine's senior gift expert. "In today's economy, gift givers are looking for a bigger bang for the buck, and personalized products seem to offer consumers that little something extra."
This comes as no surprise to Stephanie and Dorr Eddy, owners of Calliope Designs Inc., and the designers of their personalized ornaments. They have been in the business of offering handmade ornaments, on which a retailer can pen personalized messages, since 1971. "We have 450 different clay dough ornaments available for kiosk and cart vendors," says Stephanie Eddy. "All are hand made piece by piece, baked and coated, in order to make the surfaces easy to write on," she says. All are also very colorful, and the color is in the clay. Some also have some glitter applied to the designs.
These are all original designs and many come in, "families," that is, like designs, such as snowmen groups in 2, 3, 4 and 5 images. "These are popular for families with children," Eddy says, noting, "they are our biggest category." Among the most popular designs are, "Our First Christmas," for newly marrieds, "Baby's First Christmas," new homes, weddings, units for people expecting a baby, sports, pets and a dog bone. "Our ornaments are whimsical," Eddy says, "although we do have some religious styles, such as a Celtic cross and a church bell."
All the designs are shown on the company's website, and also shown in a catalog that is free to vendors. Vendors also get a price list and samples, along with a booklet on personalization that provides a list of important and popular phrases for vendors to ink on the ornaments. "The booklet also has lettering pages that include tricks to make anybody's handwriting cute," Eddy says. "We send some practice ornaments for free, and encourage vendors to show a couple of them that carry names and phrases. A lot of pens work, but we send the one that we have found works best, and the ink dries instantly. Ours only uses black ink, but we do have several vendors that have become very creative and use colors and other embellishments. Personalization doesn't take long," she adds.
A successful minimum order calls for an initial investment of about $4,000, which gives 1,200 ornaments, six each of any single design in an overall selection of 200 different styles, according to Eddy. That translates to an average wholesale cost of about $3.50 per ornament. "Two hundred styles on a kiosk can give a fabulous selection," she says. The suggested retail prices range from $12 to $16, allowing, she notes, "for a nice mark up." After a discussion about a vendor's location and market, Calliope Designs will help put together a first time order that matches the vendor's demographic market and price points. It also offers display ideas that have been proven.
Eddy urges vendors to group ornaments by subject matter. "There should be a small side display for sports themes, an area for pets, weddings, new homes and other themes that help attract a very targeted clientele," she reasons. The address is a popular personalized note on a, "First Christmas in our new home," ornament. "Will you marry me?," is also a very popular message to be written on a wedding ornament," she adds. The expecting a baby ornaments are often purchased in multiples as birth announcements, she points out. As for the family groupings, she says if a vendor just carries one with three images, he or she will automatically lose the customer that wants a gift for a family of four.
Eddy freely acknowledges that Calliope Designs is a seasonal hit, "and the season is November and December. Business really picks up the week before Thanksgiving," she adds. Although it is seasonal, she points out that many people who have bought personalized ornaments in the past, seek out the vendor the following year.
The following people at these companies were interviewed for this article:
Stephanie Eddy, co owner
Calliope Designs Inc.
3710 Wallace Road
Santa Rosa, CA 95404
Toll Free: 800-700-7178
Cheri Mitchell, owner
Remote Control Hobbies
3325 Calder Ave.
Beaumont, TX 77706
Topic: Kiosk Korner
Entire contents ©2017, Sumner Communications, Inc. (203) 748-2050. All rights reserved. No part of this service may be reproduced in any form without the express written permission of Sumner Communications, Inc. except that an individual may download and/or forward articles via e-mail to a reasonable number of recipients for personal, non-commercial purposes.