SHRINKAGE FACTORS
Does Your Product "Grow Legs?" That's Not a Good Thing.
By James F. Riordan
Most first-time product developers have a tendency to believe that there is no difference between whether their product is sold or stolen. They believe that either way, the product has disappeared from the shelves, and that is good for them. Certainly, this is a one-sided view.
The truth is, most retailers avoid reordering merchandise that is displayed in bulk and "disappears" or "grows legs" easily. I call this the "shrinkage factor."
Winning products are those that either by themselves or in their individual packaging are larger than the pocket opening on most clothing, wider than the opening of the average purse, and longer than the average lunch box.
Riordan's Law states:
1. The shrinkage factor increases in direct proportion to the distance of the display from the cash register.2. The shrinkage factor increases in direct proportion to the price of the product.
3. The shrinkage factor increases as the size of the product decreases.
4. The shrinkage factor increases in direct proportion to the fad value of the item, even if the item is inexpensive.
5. The shrinkage factor increases in direct proportion to the product's ability to be resold.
6. The retailer's disdain for the easily-stolen product increases geometrically in proportion to the cost of the product.
7. The amount of reorders you will receive for a given product decreases as the store buyer's disdain for the product increases.
A few examples of products prone to "shrinkage" are "bulk products" found on store counters such as candy, key chains, mini flashlights, rings, batteries, etc.
Depending on the type of product you are selling, you may have to compromise between making the package large enough to make it harder to steal, yet small enough to allow it to have an acceptable "footprint" when it comes to shelf space and disposal.
The above article was taken from James F. Riordan's classic book, HOW TO EVALUATE THE POTENTIAL FOR SUCCESS OF A NEW PRODUCT OR TECHNOLOGY. Riordan's highly-acclaimed, 36-point system is a valuable tool for inventors, product evaluators or anyone interested in the invention process. Each section is followed by a comprehensive questionnaire that can be used to evaluate your product.
The highly-recommended book can be ordered through the Dream Merchant, 2309 Torrance Blvd., Suite 104, Torrance, CA 90501. The phone number is (310) 328-1925.
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