How can you best use goods sales?
The best known, oldest, and the most common revenue model is goods sales. We tell you the opportunities and threats of this model!
Selling goods is a simple revenue model (part of the business model) to integrate within your business. Selling goods is perhaps the best known and most common way to use as a revenue model. But what does this revenue model entail, what are the advantages and disadvantages, and how can you best use it?
Goods sales as a revenue model
Selling goods is nothing more than buying an asset. For a company, this means anything that has economic value to sell. So it can be both tangible and non-tangible products. For this revenue model you do not necessarily need a physical store! You can also sell it through an online store.
These goods do not have to be equal in economic terms, which is why a Coca Cola can has a different price than a can of Pepsi. In the end, they are the same products: a can of Coke. But the value per product differs. This is because there is a certain status, positioning and image that the brand has built up.
You can use this revenue model in many ways: you can target consumers (B2C), you can target only companies (B2B).
You can also choose a specific part of a certain market with your assortment: fish trade or a second-hand computer store.
When do you use this revenue model?
I recommend that you use this earning model if you want to make money in a quick and easy way. If you are going to do this, my advice to you is to create a Unique Selling Point for your product or service.
There are plenty of companies that already do the sale of goods and with the growing competition, it is important in this business to be able to distinguish yourself from the rest. You need to stand out and add value for the customer.
In addition, I would lay out your plan as specifically as possible. The beginning will be a challenge for you, because you don’t really have a reach yet and you can kind of fall away among all the other companies. So as a start-up, make sure you use an effective marketing strategy with a product that consumers really need to have.
Return policy and returns
An important aspect of selling goods is returning them. You will always have the chance that goods will be returned. Consumers can have various reasons for this: the product did not meet the requirements, product was defective and caused damage or it was the wrong purchase, etcetera.
But how do you deal with this? It is important that you have a clear return policy for these kinds of scenarios, so that the customer is already informed before the product is purchased. This means you already have specific guidelines that you can follow when a customer returns something. Here it is important to communicate clearly with the customer to satisfy them (customer service). You can give them their money back, but also offer extra service by helping them with the problem, a possible discount or by giving them a replacement product.
Where there are problems, there are also opportunities! You can capitalize on this by reselling returned goods after they have been checked. By doing this, you get all the potential opportunities out of your products. You now know for sure that you have done everything possible to sell your products.
This is also a good example of the circular business: you contribute to sustainability by allowing products to be reused, as it were. This is good for your image, because CSR is totally hot and happening right now!
You could do this yourself with returned goods, but you could also sell it to a buyer. You are then rid of it, but the disadvantage is that they will not give you much for it.
Pros and cons of goods sales
Pros
- Simple and fast way to earn money
- Clear and simple communication
- Internet sales for goods have increased enormously
- Target audience is easy to reach
- Different variants and possibilities to deploy (B2C, B2B or the assortment)
Cons
- If there is a problem, the customer is usually entitled to a replacement product, repair or money back
- Many competitors in the marketplace so you need to be able to differentiate yourself
- You are likely to incur unexpected expenses
- Customer relationships can be difficult to maintain, especially with general stores
