No matter the state of the economy, pitching higher-priced furniture products makes sense all round, suggests our US correspondent Gordon Hecht, writing for trade magazine Your Source News …
Unless you live in Oregon, New Jersey, or Huntington, NY, you might never remember a time when gas stations were full service. That is, they hired people to operate the fuel pumps for you.
Pre-1980, you’d pull your car into the station and crank down the driver’s window. A uniformed employee gave you that ever-pleasant greeting, “Fill it up with premium.”
Back then we didn’t know it was an assumptive close. Customers were likely to reply, “Two dollars of regular, please.” The clerk would pump the gas and wash the windshield. Upon request, they would also check your oil along with the water in the radiator and the battery.
There were a couple of reasons why the pump jockey encouraged customers to fill up with premium gas. First, the customer would get greater performance in the short and long run for upgrading to the good stuff. On top of that, the station gained an extra dime in revenue for each gallon they sold.
Other than the fact that a lot of those guys were puffing on a Lucky Strike while filling your fuel tank, they were pretty smart. Greater customer satisfaction plus greater revenue is a winning combination for any business.
This year is a great time for resolving to fill up your showroom with premium products too. It’s easier to reach your sales goals with higher-priced models, be it mattresses, motion sofas, or ranges. Want to sell a million this year (or month, or quarter)? It takes two thousand sales of $500 items to get to a million, or two hundred tickets at $5000. Which do you think your sales and operations team prefers?
Margins run higher on high-value merchandise. In the mattress game, margins on $499 beds hover in the mid- to low-40s, averaging $220-230 in gross profit dollars. Check out that $4999 mattress, and you’ll see that it delivers margins at 55-60% or more. You’ll collect around $2800-3000 in gross dollars with every sale.
Most retail stores see their greatest margin dollars from their second most expensive product. Top out at $10,000, and sales on the $7999 item will rise. Top out at $3000, and the $2499 product will be your top money maker.
Manufacturers in every arena know that this is the way to go. You’ll see more merchandise this year with the features, options, durability and appearance to justify luxury pricing. Premium bedding is driving the mattress market, with Q3 sales from last year showing a 12% gain in average unit selling price.
You’re probably thinking, “Sure, I want to sell higher prices, but the economy is so uncertain these days.” Certainly, the housing and employment markets are rocky. That makes it more important to increase your offering of premium goods. The low-price budget market is shrinking due to those typical shoppers delaying purchases. Additionally, you’ll never win trying to compete on skinny-margin beds, fridges and sofas.
Here’s where the luxury market stands in other fields as of the last YoY comparison: in the automobile world, Lincoln, Corvette, and Lexus are reporting higher than average sales – all big margin vehicles; non-motorised RV sales are enjoying greater YoY sales – these are ‘want’, not ‘need’, purchases; fresh water fishing boat sales have increased – luxury yacht sales are about equal to 2024; and designer clothing and accessory brand sales are still rising. Prada can celebrate a 17% increase in sales. Louis Vuitton, arguably the brand with the greatest number of imitation knockoffs, has a slight decrease of 1%, but is up 10% since 2022, and almost double where it stood in 2020.
Displaying higher-revenue merchandise is the first step. Next is training and rehearsing your team on product benefits – those cool, unique features that put the goods in the premium class.
The final step is letting the world know that your shop is the place to fulfil their desires to get the best. Shout it from the rooftops on your website, social media, email and text blasts, any way you can get the message out.
In 2026, as in every year, there are two sure-fire ways to increase revenue in your shop. Convert more shoppers into customers. And sell each customer more. Premium products are your ticket to doing both.
This article was originally published by Your Source News. Gordon can be reached at [email protected].
