30 days to Becoming an Entrepreneur: Planning for ancillary sales

Ancillary sales can be a huge money-maker. It certainly has been for the airline industry. You know that luggage fee that has changed the way we all pack? That’s an ancillary sale. Ancillary sales basically are fees, services, and products that are complementary to your main product or service. Other examples are snacks at gas stations, bubble wrap/moving boxes at storage units, and software/anti-virus protection when buying a Dell computer. Sometimes, your ancillary revenue can surpass your main revenue.

When your first starting out, it can be easiest to just focus on your main products. Ideally you’d have all your offerings available right away – but sometimes that’s not always feasible. At The Woof Room, we didn’t have much for ancillary sales until we had been in business almost a year. We were too busy focusing on getting the business up and running to deal with the additional cost and time involved with selling other things. Eventually, we did add some products (frontline, biodegradable poop bags, dog toothbrushes) as well as light grooming (bath, ear cleaning, nail grinding, teeth brushing). We’ve had these things in place for about 6-10 months and they currently make up 5-10% percent of our monthly income.

Since selling ancillary products often require an outlay of cash, you’ll want to make sure that what you buy has a long shelf-life and will likely sell. For example, Frontline is a moderately expensive item. Because we didn’t know if it would sell, we only order a few of them to test the waters. We quickly sold all of them within a couple weeks and now regularly stock them.

Lastly, be mindful when picking and pricing your products. We actually did a survey of all our customers to see what they would like to see us sell/offer. This was very helpful because we were able to get feedback from our customers about what they’d buy. We picked our products based off their feedback and the likelihood of them selling. Additionally, we priced them to be lower than what a client would pay elsewhere – while still providing us with a decent profit (20-50% on most items).

Next, 30 days to Becoming an Entrepreneur:Navigating the world of business partnership

Photo Credit: Amanda

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