Exporters selling consumer goods in the United States compete in one of the world’s most developed markets. The US consumer goods industry, which was estimated at $419.4 billion in 2012, is the world’s largest and is widely regarded as the leader in terms of product development, placement and promotion.
Goods are defined as consumer products according to the buyer’s intent. A light bulb, for example, that’s used in someone’s house is a consumer product. If it’s bought by a business to light a factory, then it’s classified as an industrial product and the way in which it’s sold is quite different.
There are four main categories of consumer goods.
These products are often referred to as fast moving consumer goods and include items like food, soft drinks and household cleaning products. Convenience products typically have high turnover and low margin. If you’re selling products like these, you’ll be expected to promote them yourself and you won’t get much help from retailers like mass merchandisers, category killers and warehouse clubs. Products are often displayed in their case packaging and this is often used as the primary way in which the product is promoted.
The main challenge for suppliers of convenience products is putting a supply network in place as these products require widespread distribution. Because the products are low margin, retailers don’t want to hold much inventory and so replenishment is a major challenge. It’s necessary to design a supply chain that can be highly responsive while keeping your inventory low. Many suppliers find outsourcing inventory management is the only way of penetrating markets quickly without having to make major capital investments.
Buyers take more care in selecting shopping products like appliances, furniture, clothing and jewellery. They take time to compare prices and brands and familiarising themselves with product attributes. This indicates shoppers have lower brand loyalty than for convenience products, which means a lot of money may be needed to promote products.
Because shopping products are purchased less frequently, inventory turnover is lower and resellers will expect higher margins. Products will not be sold at as many outlets as convenience products, which simplifies distribution. However, retailers might require a parts replacements service for their customers and special logistics requirements for this will need to be in place.
Unique products like paintings or vintage watches and stamps are sought out by consumers. These products are sometimes sold through retailers who sell only those sorts of products, but they’re increasingly being sold through e-commerce channels as the internet provides the best opportunity of alerting consumers that these products are available.
Speciality products have very low turnover and the margins on these products are usually high. They don’t have to be shipped often, but when they are sent to consumers, it’s likely that they’ll need specialised packaging to prevent them from being damaged. Proof of delivery is also really important because the products are typically expensive.
These are products that get purchased when specific needs arise. Roof tiles, for example, might only be purchased after a big storm. Other unsought products could be services like life insurance, which require aggressive selling.
Whatever your supply chain looks like, UPS Quantum View gives you complete visibility of the movements of your inventory. It’s a web-based tool that doesn’t require you to download any software to access it.
Instead of tracking individual shipments online, Quantum View Manage enables you to view information on all shipments from a single interface. This enables you to view goods you may have imported for your production process. Using Quantum View enables you to view duties, taxes and fee information about these shipments. You’re also able to look up harmonised tariff codes for your exports and view 45 days of shipping history – both inbound and outbound – at any time.