3 Reasons Why You Need High Margin Products in Your Store

Apr 22, 2022

Without any doubt, every business owner has the same goal: to make money. And yet, too often business owners become lost in how they can achieve this. There’s a lot on any retailer’s to-do-list, but what needs to always remain top of mind is the products that are being sold. Are they interesting to your customers? Do they generate sales? Are they helping your store make money…or are they costing your store money?

When you look at the core of any retail business, it comes down to what is being sold. The price points of inventory help separate one store from another, and the markup on items sold in every retail store are what make or break the success of each unique retailer. This said, however, having the right markup vs. the wrong markup on inventory is what helps keep stores alive, afloat and in business.

Too often, merchants think low-priced items with high margins aren’t good for business. This myth is far from true…fortunately. Many retailers who rely on high margin inventory find greater success and stronger sales when sourcing products for their stores. To help understand how this works and more specifically, how this could work for your business, consider the three reasons below.

Reason #1: Lowering your wholesale price can help increase your retail price

The retail margin – also known as the gross margin – measures the relationship between the costs you pay and the price you charge your customers. By buying items priced at a lower wholesale price point, you can markup your retail price by more than average. In other words, a bracelet bought for $1 at wholesale could be sold for anywhere from $10 to $20 – or even more – at retail. However, that same bracelet bought at $5 would still be expected to sell for $10 to $20, based on the customer expectation.

Reason #2: Where you source your inventory can actually help you make more money

As much as you want to believe all vendors are “equal”, the truth is that many vendors know that one trade show vs. another trade show demands different prices. If you source your inventory from trade shows that are known for selling with the intent of high margin markup – such as ASD Market Week – you can feel more confident in your buying decisions. Additionally, you will be introduced to vendors you may not have discovered at other trade shows. Collectively, this delivers a strong reason for you to consider where you source your inventory as a major factor in your retail profit success.

Reason #3: The market dictates market value… but you dictate what you’ll pay for this

Whether you cater to on-the-go traveling professionals or tweens looking to score the latest must-have fashion find, you can appreciate that a “must-have” item will help create sales in your store. This said, consider what you pay for your items versus what the perception is of what they are worth.

For example, if wooden accent sunglasses become the latest must-have accessory in your neck of the woods, wouldn’t you want to get them at the most affordable price possible – then sell them for twice as much as you originally intended? I like to call it the “umbrella effect”.

If it’s raining, a customer is willing to pay an incredible markup on an umbrella just to stay dry and to simply have immediate access to an umbrella. This theory (minus the staying dry part) works for nearly any item.

Need and perception combined can be a powerful tool when marking up your items! Finally, consider what your main goal is of running your business. Is it to plan clearance sales, again and again, to get rid of unwanted inventory or is it to run a profitable business as easily as possible?

If making money is your goal, buying high-margin items needs to top your to-do-list. It really can be that simple.

Learn More About Running A Successful Retail Business at ASD


Want to learn more about how to source inventory and fill your shop with the right high-margin products? The next ASD Market Week is in Las Vegas – a merchandise trade show and free retail education conference in one! Register For Our Next Show! 

About ASD

At ASD Market Week, you’ll discover higher margins, a wider selection of on-trend products, and the newest merchandise while meeting over 2,700 vendors. ASD Market Week is truly the wholesale buying event that can’t be missed.
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Macala Wright

Macala Wright

Macala Wright is a writer and researcher who specializes in health, wellness, food, and farming. Her expertise has been published in the New York Times, Wall Street Journal, San Francisco Chronicle, and many more publications. When she’s not writing about consumer behavior or food, she can be found scouring for deals in antique shops or on the back of her horse. You can follow her on Instagram @Macala or visit https://www.maca.la.
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