3 Reasons to Consider NOT Selling Product
I'm sure many of you are gasping at that headline! I know a lot of designers make the bulk of their money selling product to your clients, but given how the world is changing maybe you should consider switching up your gameplan. Here are 3 reasons for moving away from product sales!
1. Profit Margin
Now I know you probably understand what profit margin is, but just to be sure - it's basically the percentage of money you make AFTER the expenses come out. And that includes your time. The higher the profit margin - meaning the less effort and money you put into it - the more money you make. You and I both know that procurement is expensive for us. It takes a LOT of time to find the right product and then to track it and keep tabs on quality and accuracy of what we ordered. It is a PAIN, especially today when there are so many delays and issues with shipping and damage. You can spend ALL DAY every day on tracking orders. It eats away at the bottom line because those are hours that could be spent on other clients and projects! If you moved to design consulting (everything EXCEPT selling product) your profit margins move to 95% or more! That's because the only thing that goes into your work is your time. You make FAR more money that way.
2. Fewer Headaches
I spelled out a few of the headaches involved with procurement above, but one of the biggest is that you just can't make as much money selling product anymore. The manufacturers are reducing your designer discount, the Internet is giving your client even more ways to shop you, and many clients at the luxury level are beginning to push back against any markups you might want to charge on the products you procure for them. It's a NO WIN situation! You can cut ALLLL of that out by deciding not to sell product. Some designers I know will only help their clients procure at a retail level, which also works. You still will avoid all of the shipping/damage issues, and you can charge for the time you spend working with them to get those products at retail. Fewer headaches, more money. I like the sound of that!
3. Focus on Your Talent
One of the unfortunate side effects of selling product is that your clients start to think of you more as a furniture salesperson (Ugh! Especially now with the daily delivery changes!) and less as a very talented creative! You want to keep the focus on your talent, expertise, and skills. Your clients hire you because you are incredibly good at what you do, not because you offer a discount on a sofa. That should be the focus of how your market yourself to clients! And if you want to provide them with product, you can always create custom looks. That allows you to showcase your creativity again - AND to make more money since you can mark those designs up however you like.
If you've been selling product for a long time, you may have a time period where you need to slowly move your clients to this new idea. To help you with that, download my FREE Setting Client Expectations Guide. It will help you move your current and former clients into your new business model. Good luck!