Merchandise Life Cycle for Small Retail Businesses and Small-Batch Manufacturers

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When I started working in a retail buying office, I found it to be an exciting time in my life.

I adored being part of the decision-making that shaped what customers bought. Specifically, I enjoyed learning how to understand my customers so deeply that I could shop of them — thousands and thousands of them.

What you and I have in common is that we excel at translating visual or emotional inspiration into something a customer will pay for. We also have strong presentation skills — from visual communication to store merchandising to selling. Like you, I love this large portion of the job being a merchant!

During this early part of my career, I could have left the rest of the merchant role behind. Believe me when I tell you, I tried and here’s how it went!

Ultimately, I couldn’t. I couldn’t pick and choose what to focus on and what to ignore, and neither can you.

I quickly learned that selling inventory to a paying customer happens in an ecosystem of sorts and that this environment has an infinite amount of influences — some that we control and some do not.

Listen to this week’s podcast episode to get a bird’s eye view of the merchandise life cycle so that you can have more clarity and control of your time.

– The difference between operating a business on a solid foundation vs. shaky ground
– Unlocking more personal time off by mastering production management
– Learn the six phases of the merchandise life cycle
– Similarities and differences of how retailers and makers or small-batch manufacturers move through the merchandise life cycle

After you’ve listened, it’s time to take action! Remember: Knowledge and action are most effective when applied within the context of your unique business using your unique style.

Why might small retail businesses and small-batch manufacturers offer promotions and discounts during the maturity stage of the merchandise life cycle?

Introduction:

The life cycle of merchandise is an essential aspect of retail businesses, including small retail businesses and small-batch manufacturers. The merchandising life cycle describes the various stages that a product passes through, starting from its introduction to the market to its eventual obsolescence. Understanding the merchandise life cycle is crucial for small retail businesses and small-batch manufacturers, as it helps them identify the ideal time to introduce new products, manage inventories, and plan for promotions and discounts. This article aims to explain the merchandise life cycle and how it affects small retail businesses and small-batch manufacturers.

The Stages of Merchandise Life Cycle:

The merchandise life cycle consists of four stages; introduction, growth, maturity, and decline. Let us examine each of these stages in detail.

1. Introduction:

The introduction stage is the first phase of the merchandise life cycle. At this stage, the product is newly introduced to the market, and the primary goal of the business is to create awareness about the product to potential customers. In this stage, the product has low sales, and the cost of production is often high. Small retail businesses and small-batch manufacturers are advised to keep their initial production small and monitor sales to ensure they do not have a surplus of unsold inventory.

2. Growth:

The growth stage is the second phase of the merchandise life cycle. At this stage, the product gains traction, and sales start to rise. The focus of the business shifts from creating awareness to expanding the customer base and increasing market share. During this stage, small retail businesses and small-batch manufacturers might increase production to meet demand and expand their product line to cater to different customer needs.

3. Maturity:

The maturity stage is the third phase of the merchandise life cycle. At this stage, sales are at their peak, and the product has become mainstream. The competition is intense, and the focus of the business is to maintain market share while identifying ways to reduce the cost of production. Small retail businesses and small-batch manufacturers might consider offering promotions and discounts to entice customers to make repeat purchases.

4. Decline:

The decline stage is the fourth and final phase of the merchandise life cycle. At this stage, sales start to drop due to market saturation, competition, and/or the introduction of new products. The business may decide to discontinue the product or reduce production, depending on the product’s profitability.

Application of Merchandise Life Cycle to Small Retail Businesses and Small-Batch Manufacturers:

Small retail businesses and small-batch manufacturers must understand the merchandise life cycle to plan adequately for their business. Here are some applications of the merchandise life cycle to their businesses.

1. Planning New Products:

Small retail businesses and small-batch manufacturers can use the merchandise life cycle to plan for new products. They can assess the stage of the products they currently have and identify gaps in the market for new products. For instance, if a business has several products in the growth phase, it might consider introducing new products to cater to different customer needs.

2. Inventory Management:

Inventory management is crucial for businesses, and understanding the merchandise life cycle can help small retail businesses and small-batch manufacturers manage their inventory efficiently. They can plan their stock levels based on the stage of the products. For instance, during the introduction stage, they might have a lower inventory level until they ascertain the demand for the product.

3. Promotions and Discounts:

Small retail businesses and small-batch manufacturers can use the merchandise life cycle to plan for promotions and discounts. During the maturity stage, they may offer promotions and discounts to incentivize customers to continue buying the product. It can also help them clear out inventory for products in the decline stage.

Conclusion:

The merchandise life cycle is an essential aspect of retail businesses that small retail businesses and small-batch manufacturers must understand to thrive. By understanding the four stages of the merchandise life cycle, they can plan for new products, manage their inventory, and offer promotions and discounts effectively. Ultimately, this knowledge can help ensure that their business stays profitable and competitive in the long run.

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