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High Margins For Kiosk Success

Aug 1, 2009

Because carts and kiosks necessarily contain a limited variety of product, it is not only important that products sell through at a rapid pace, but also that each sale garners the vendor a healthy profit margin. The pace of sales relies on the appeal of the product, along with the vendor's skill at product presentation. The profit margin potential is intrinsic to the products themselves.

Sunglasses are historically among the highest profit margin products contributing to success in carts and kiosks. Within the large universe of sunglasses suppliers, Kachina LLC has built a 30 year tradition of supporting the efforts of the small retailer with a high quality, designer inspired sunglass selection. Over three decades, "we developed the marketing expertise necessary to build a network of offices supplying more than 20 million sunglasses annually to more than 10,000 retailers around the world," says Guy Weizmann, general manager of the Santa Ana, CA based company. "We have maintained consistent, long term growth, gearing our programs to the small to mid size retailer who orders between 10 and 100 dozen glasses at a time," he adds.

Weizmann notes that Kachina has the capacity to service large, multi location retailers who buy thousands of sunglasses per order. For the kiosk retailer, Kachina offers 300 of the hottest designer inspired, sunglass styles, representing all of the big name, European designers that consumers love. Three such collections stand out and offer special appeal to cart and kiosk vendors. "The Silver Sunglass Collection is our most popular and offers our clients the best value," says Weizmann, noting that margins on this collection range from 300 percent to a whopping 1,200 percent. The suggested retail price points for units in this Silver Collection range from $10 to $15, according to Julia Lemke, Kachina's marketing director.

Four years ago, in response to its retailers' requests for a higher quality, higher fashion line with appeal to more sophisticated consumers, Kachina introduced its Gold Sunglass Collection. These units typically retail for $15 to $20, Lemke says. At those higher price points, the margins still top the charts at a range of 150 to 650 percent, according to Weizmann.

Two years ago, Kachina answered the demand of retailers that required a lower wholesale cost, and a lower price point targeted to the price conscious shopper, the company's Classic Collection. "This has been a successful departure from our regular designer inspired, high fashion sunglasses for which we are known," says Weizmann. "The true value of this collection is not its low cost. Rather, it meets the demographics of conservative, mid America, offering many aviator inspired styles and traditional metal frames," he says. Its typical retail price points are between $6 and $10, making them easy for consumers to pick up on impulse, and often even in multiple styles.

In January of this year, Kachina introduced a new website that gives its retailer customers the ability to log in to the company's customer support system and place their orders 24/7, estimate their UPS shipping cost, and receive the real time status of current orders. There are additional savings and conveniences available to the customer placing their orders online. "The retailer also maintains full visibility of all previous orders placed with Kachina for review and analysis," Weizmann notes.

Customer support goes well beyond streamlining the ordering process. More important is the company's ability to analyze a vendor's customer demographics by age, gender, and geographic region. "Following this analysis, we can recommend the most effective selection of styles, in order to increase that particular retailer's sunglass sales, or create a new revenue source for the new sunglass retailer," Weizmann says. "In our recommendations, we guarantee that we will get it right, or we will gladly take back the sunglasses we recommend," he promises. Kachina also offers weekly and monthly promotions designed to keep the vendor's costs down.

"In order to catch people's attention and make them want to stop and try on sunglasses, a kiosk vendor has to make sure displays stand out," says Lemke. "Make sure you have a great looking, sophisticated presentation, because no matter how fabulous your sunglasses are, if they are not presented properly, people will just pass right by," she warns. To help retailers super charge displays, Kachina offers a variety of displays. Among them is an acrylic countertop unit that rotates and has mirrors on both sides. "This display gives people immediately the impression that they are looking at a high end, must have sunglass collection," she says.

To start, a kiosk or cart should have at least 25 dozen different styles, Weizmann advises. "Each style should be shown in assorted colors, so there's an attractive looking mix," he adds.

From Fashion to Utility

Yes, fashion sells, as Kachina has proven. So do utilitarian gadgets. One such tool, the Select Tool Master Sharpener from Select Product Promotions in Las Vegas, performs multiple tasks in a single, six by one inch hand held device. It is a glass cutting and sharpening tool that contains a glass cutting wheel, knife sharpener, special guide for serrated knife sharpening, another for sharpening scissors and shears, and still another that can be used to sharpen large knives and gardening tools, such as scythes. To perform the latter, the blade has three holes, so the master sharpener can be elongated to accommodate these big garden tools. It is made in the U.S. by people with disabilities, notes Eddie Morgan, owner.

Two features, in addition to its intrinsic handiness, make it especially important to kiosk and cart vendors. One is its ability to attract consumers through on site demonstrations. The other is its profit potential. The minimum order is a case of 144 units, each individually boxed in a box that illustrates each of its five features. The case wholesales for $324, which translates to $2.25 a unit. The suggested retail price is $19.95, and Morgan says it is selling at some places for as much as $25.

"With a little practice," he says, "the glass cutter portion can not only cut straight lines, but also curves and circles. The unique design allows the user to hold it like a butcher knife, and it gives a high level of control," he explains. To sharpen regular knives, lay the device on a flat surface and run the blade across it twice. Pull scissors through that portion of the master sharpener in just a couple of strokes.

Select Product Promotions will provide vendors with art work for a schematic drawing of the Select Tool Master Sharpener, which the vendor can enlarge as a sign. The schematic shows in an instant the utility of the tool. In addition, the manufacturer can provide, for just $2.25, an instructional CD that demonstrates the product in use. He highly recommends, however, that vendors themselves present ongoing demonstrations.

"We encourage kiosk and cart vendors to carry this product alone, he says. "If the retailer has to break away from a demonstration to discuss another product, passersby may lose interest," he reasons. "Demonstrations draw a crowd," he adds.

According to Morgan, a vendor can make sales totaling $1,000 to $1,200 on a good weekend day. "The product sells well year round," he adds, "and it sells equally well to women and men." He recommends that a vendor begin with at least two cases. Reorders will be shipped the same day, if the order arrives in the morning, or the next day.

The following were interviewed for this article:

Guy Weizmann, general manager
Julia Lemke, marketing director
Kachina LLC
1640 East Edinger Avenue # L
Santa Ana, CA 92705
Toll Free: 800-550-1231
Tel.: 714-550-0209
Fax: 714-550-0210

Eddie Morgan, owner
Select Product Promotions
3853 Rolling Cloud Drive
Las Vegas, NV 89115
Tel.: 702-651-9040
Fax: 702-644-4576

Topic: Kiosk Korner

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Article ID: 1130

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