Preparing to sell
Factors to consider before you sell
There are a number of factors to consider before selling to ensure success.
All businesses face competition, and success is often based on how well you respond to it. You should be aware of your competitors and always strive to develop a competitive advantage over them.
To gain a competitive advantage, you could:
- raise or lower your prices
- improve your product or service - improving or modernising features or the manufacturing process
- use creative channels of distribution - such as channels of distribution not normally associated with your product or service
- exploit supplier relationships
Market share is the percentage of all sales within a market that is held by one brand/product or company and can be measured in several ways, such as:
- sales revenue
- sales volume
Market share is directly linked with profitability and many companies aim to increase their sales relative to their competitors.
You can measure your company's performance relative to a competitor by the proportion of the market that your company is able to capture - Market Share = company sales divided by total market sales.
You can increase market share by:
- providing more value for potential customers - eg improving product quality
- price cutting - to increase sales revenue, though this tactic may not succeed if competitors are willing and able to meet any price cuts
- adding new channels of distribution or increasing the intensity of established distribution channels
- promotion - increasing advertising expenditure, though competitors may respond accordingly
The consumers that buy your business' goods or services define your customer base. Consider the things you should know about them, including why they might buy from you. See assess your customer base.
A niche is a small but profitable section of a market that is often suitable for a specific range of goods or services that meet a particular need. You can create a niche market by identifying customer needs or wants that are not being addressed by competitors and by offering products to those customers
Your company will need a well-developed marketing strategy that will act as your marketing roadmap and forms an essential part of your overall business plan. See create your marketing strategy.
Before you begin to sell a product or service, you should ask one question of your company - what does your brand stand for?
For your brand to stand out in the marketplace it should make an emotional connection with potential customers.
You should aim to sell an experience rather than a product, for example a financial service providing peace of mind.
Read more about branding for your business.
Some products are sold via wholesalers. Wholesalers buy goods from producers at a reduced price. After adding on their profit margin, they then supply the goods to retailers who sell to the public.
Most businesses will be able to sell to wholesalers, as they can provide a good way to reach many retailers at once. However, you should look closely at the profit margin you need to make in order to remain profitable. This is important to ensure you don't sell your products too cheaply to the wholesaler who will always want the lowest possible price from their suppliers.