- To handle a name brand or not
Your business may decide to handle product lines that are not major nationally
advertised brands.
These products may have unique features of quality and performance.
They may not be generally available in the business's chosen market area.
The manufacturer may offer some territorial exclusive to its dealers.A business may not enjoy the same volume of sales handling this type of
product line; however, the gross margin on the selling price is usually higher.
There are advantages and disadvantages to handling name brand and national
advertised products. They are sometimes seen (to coin a business phrase) as
high volume, low gross products. This means that they tend to attract sales
volume, but they yield a low gross margin on selling price.
Handling this type of product can raise the profile of your business and attract
customers. In addition, if the products allow the business to generate enough
gross margin to offset a substantial portion of the business operating expense—
it may be worth sacrificing control over the marketing of the product.
Here are some questions that can help you in your research and decision-
making.
- Do any of the manufacturers offer a territorial exclusive to its dealers?
- What are the advantages and disadvantages of carrying name brand or
nationally advertised products? - What are the advantages and disadvantages of carrying non-national
advertised products? - Which route will your business use? Why have you made this choice?
- How will your decision benefit your business?
- How will your decision benefit your customers?