Question

Topic: Strategy

Rates For A New Product Sampling Program

Posted by Anonymous on 6/5/2008 at 1:00 PM ET 125 Points
I am the Development Director for 4 resale stores that benefit the work of a large, community based medical center. I'm always looking for ways to increase revenue, so I thought I might create a product sampling program that would enable local or national manufacturers to distribute samples of their products to all of our customers. We ring more than 250,000 transactions a year and our customers are primarily of the lesbian & gay market.

My questions realtes to rates for such a program. Can anyone advise me what would be a typical rate structure for sampling, say for one month of sampling in our stores? For instance, I just don't know I should offer this service for $250 a month or $1500 a month.

Any insight would be greatly appreciated and is for a good cause. Our proceeds are used to pay for medical services for uninsured people or those without finaicial means.

Please send replies to donaldr@howardbrown.org

Thank you!
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RESPONSES

  • Posted by Levon on 6/6/2008 at 8:18 AM Accepted
    I think it largely depends on the distribution costs and the burden it will put on your resalers for stocking, shipping, documenting, man hours, shelf space. This is largely a cost accounting issue. Then find out what it is worth to you to offer this service and play around with a price metric that suits some profitability.
  • Posted on 6/10/2008 at 9:49 AM Author
    Thank you for your advice on this. One of the reasons I like this idea is that the manpower issue is not much of a consideration. The sample product would just be placed in a bag at the pointof checkout.

    So what I've done is take the number of transactions per month per store and worked up a number per piece that sounds attractive (low) for marketing purposes. The number I ended up with turned out to be pretty darn close to the number I was aiming for.

    Thanks again!
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