5 Part Guide to Increasing sales with add-on purchases – The Counter.

[Part 1 of 5]

The concept is simple: if your store is getting 500 customers per day, and customers are buying an average of $4 per transaction, you’re making $2000 per day. 

To make more money you either need more customers, or sell existing customers, more stuff. 

From my experience, it is much easier to get existing customers to buy more.

The following is part 1 of a 7 part guide, with a variety of tips, tricks, and how-to’s for generating incremental sales with add-on purchases: 

The Counter

It is a well known fact in the c-store world that the Counter is a magical place, where “anything” can sell.  The sad thing is however that it is more than often used to sell the wrong things.  How many times have you come in to a convenience store and saw a bunch of “crap” just piled on high.  It seems like the owner’s strategy is to take everything that’s not selling and stick it on the counter. 

WHAT A WASTE of this tremendous selling space!

It doesn’t take a lot of analysis to see the missed sales opportunity here, so lets try a simple example using a convenience store with a counter large enough to fit 3 boxes of candy. The following numbers are my professional guesstimates, feel free to read my “about me” to learn more about my qualifications.

Candy X, Candy Y, and Candy Z come in boxes of 36, retail for $1, and are 50% GP.  They are also “dead items”, or things that have been sitting on the shelf with 0 sales for the past month.  Assuming that to begin with, they were properly merchandised and priced, it seems clear that the customers have voted, and they are not interested.  Now the typical convenience store owner’s mindset is “I don’t want to lose money by throwing them away, so I will put them on the counter and surely they will sell” – the result: now the candy goes from selling 0 to selling maybe 2 per week (best case scenario). That means it’ll take (36 in a box / 2 candies per week) 18 weeks to sell through the 3 boxes, making the owner (36 in a box * 3 boxes * $1 retail) $108 in sales or $54 GP. 

Now what would happen if instead of going on the counter, the candy was thrown away (you would never actually do this, you would first mark it down and price it appropriately).  We would start with a loss of $53.46 but into our 3 spots on the counter we put our 3 top selling impulsive candies IE Snickers, Reese’s, & M&M’s.  For simplicity’s sake lets assume the same retail and GP%, but unlike the dead items, putting these top sellers on the counter will give you an incremental 2 sales units per day each (at least).

So lets do the math.  (2 units/day * 7 days * 3 boxes * $1 retail * 18 weeks = ) $756 in sales over the same 18 weeks, or $378 GP subtracting our throw away cost of $54 we get a net GP increase of $324.   Of course if the sales of these top sellers only go up by 1 candy per day you still make an extra $135 (after subtracting the throw away cost).

I know this example was over simplified, but you will be pleasantly surprised to see that in the real world the numbers work out even better because there is a chance that those dead items might only sell 1 per week, while the top sellers could easily be an extra 3 units per day.

So in summary, step 1:

Get rid of all that old crap on your counter and replace it with

 TOP SELLING, IMPULSE items.

Be careful not to put too many products, or risk losing the impulse appeal… (more on this later)

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If you would like to increase your sales and profits by maximizing the opportunities in your store, please contact me for a FREE email consultation at:  c-store-expert@greatconsult.com