We’ve talked a lot about the need for fireworks stand operators to be savvy business owners.
You’ve got to do your research on where to put your stand, what the local laws are, what type of structure you’ll need to sell and store your products and who to hire.
And as if all of that wasn’t overwhelming enough, you need to study up on the basics of building a product catalog, setting prices that benefit you and your customer and merchandising your products in a way that’s appealing to your customers.
That’s right; a successful operator is someone who can think like a retail strategist. But that’s why we’re here — we are going to help you create a retail environment that will boost your sales and help your customers get exactly what they need. We’re going to walk you through how to build up your product catalog, how to set prices and how to merchandise like a pro.
How to Build Up Your Catalog
Think of your fireworks catalog as a menu for your shoppers. You don’t want to limit your store to just one or two styles of fireworks …. novelties and Roman candles, for examples.
As we talked about in the first part of our series on choosing product, consumers like variety even if they aren’t going to buy everything in your store. Just the appearance of different products and prices is conducive to a positive buying experience.
Best case scenario: Have a source in the industry
So how do you go about creating a solid product catalog? First, do some research about what people are buying. You’re in good shape if you can find a source within the industry who is willing to talk to you about popular products.
Backup plan: Do your own research
If you don’t have a source in the industry, do some investigative work on your own. One season ahead of time, stop by as many fireworks stands as you can and, playing the part of the consumer, ask what products are popular and which ones don’t really sell that well.
When you know what the hot products are, start to build a catalog category by category. If you want to brush up on the main categories of fireworks, click here to check out our first post in the series, where we discussed details about the major product categories.
How to Set Up a Buying Strategy That Works
You’ll want to offer products from each of category, but it’s going to be important to provide multiple options within each of these categories. Start with what you think are going to be the big sellers. Write it down on paper or in a Word document. Borrowing the example from our previous post, here’s a format you can use:
60-gram shells (largest consumer shell available)
High — Hammer of Thunder 24 shell
Med — Heavy Ordnance 12 shell
Low — American Firepower 6 shell
Mid-Grade Ball/Canister Shells
High — Live Blast Artillery
Med — SFX Magnum Artillery
Low — Incendiary Rounds
High — Great American Artillery 3-Pack
Mid — Festival Ball Artillery
Low — 1″ Mini Magnum
What does all that mean? The document starts with a main category: artillery shells. Then, the category is broken down into three major price points: high, medium and low. Within each of those categories there are another three price points along with products which fit that particular pricing tier.
The result is a pretty comprehensive framework from which you can choose the right mix of products to fit just about any budget. You don’t need nine types of artillery shells unless you’re a larger retailer, but this can help you pick the right three for most tents. How many you choose will vary by category and will be guided by your research about what sells well in your area.
Setting Your Prices: Not Too High, Not Too Low
The upside to working as your own boss is that you get to set your own pricing strategy. The downside? You have to set your own pricing strategy. The fireworks business is particularly tough because there’s a huge variation in product and pricing.
Seasonal customers don’t know the subtleties of product and performance and are often drawn to pricing and packaging.
So, if the stand down the street is selling cheap fireworks whose quality is pretty terrible compared to what you’re offering, customers may pass on your slightly higher prices so they can take advantage of your competitor’s attractive price tags. But it’s not just pricing on individual items that can cause problems for you.
Some retailers like to push 2-for-1 sales that make the customer think they’re getting an amazing deal when, in reality, they end up paying more for fireworks they could get a few bucks cheaper at your stand.
While competition plays a part in pricing, there are some other factors you should be mindful of:
Consumers Know a Rip-Off When They See One
Even though your customers like seemingly low prices and decent packaging, they aren’t stupid. With just a few taps on their phone they can get a realistic idea of how much your products should cost. Not every shopper will do this, but the possibility is always there.
First suggestion: don’t get greedy with exceedingly high prices. Eventually, they’ll find out about it and your sales will dwindle. Remember; if your prices are too high, there’s probably another store or stand a few miles away that can offer more affordable options.
You want your customers to feel like they got a good value for their money so they want to come back.
Think About The Surrounding Demographic
Not all fireworks consumers live in the same neighborhoods or have the same amount of loose cash. What does that mean for your pricing?
Stands that sell in or near upscale neighborhoods tend to move more high-ticket fireworks like cakes and higher-end artillery shells.
In working-class neighborhoods, shoppers often prefer a variety of lower- to mid-level products, and tend to keep their spending under a pre-determined budget.
You’ll need to take these matters into account as you’re selecting your location. There isn’t really a right or wrong here in terms of the neighborhood; just be aware of what customers want and how much they can spend.
However, don’t assume that middle- or low-income neighborhoods won’t buy big ticket items like 500-gram repeaters. The key is variety — showcasing a top-end product may not appeal to the immediate demographic, but it can draw in shoppers who are passing through. Plus, you never know who will walk through your doors or into your tent.
Merchandising: Setting Up Your Products for Success
Once you’ve nailed own which products you’re going to sell and what prices you’re going to use, you’ll need to understand how to organize your store in a way that helps the consumer make choices.
Unlike the first two aspects of choosing product, this angle is a little tougher to understand. Every major retail store you walk into is organized and ordered based on some very specific psychological and economic principles.
How you set up your retail space will depend on things like the size of your space and the product you’re selling. Another factor here are state laws. In some states, fireworks are displayed in one room and sold in another. In other states only employees can touch the fireworks, whereas in states like Florida product is set out on tables and customers and pick and choose freely.
Get familiar with these laws before you create your store’s floor plan.
Three types of floor configurations
There are dozens of ways you can set up your retail space, but we suggest using some combination of the following floor plans:
In this scenario, you set up your tables in the middle of the tent so they form a square or rectangle. You and your employees will work the edges of the tent so you can keep an eye on everything that’s happening in the middle.
This is perfect for lower-volume locations for several reasons:
- You can effectively manage the space with only one or two people.
- Your display areas can look full with less product out at a time.
- You are protected from the elements by keeping your product away from the edges, so things aren’t so frantic when it starts to rain.
This floor plan calls for tables in the middle of your tent, but instead of it being a solid square or rectangle of product, there’s an opening in the middle where employees can take orders and restock. This gives you a little more flexibility but still requires that you have an employee or two on the outside of the square monitoring your customers.
This has many of the same advantages as The Island, and allows you to display more product at one time.
In this design, your tables are on the perimeter of your tent with a little space between the tables and the sides of your tent. This extra space is perfect for employees; they can float from table to table and take care of customers’ needs while other employees patrol the open middle area of the tent.
This layout provides the most product display space, and can easily be combined with The Island for maximum exposure. This also keeps your traffic flow in a simple circle that allows customers to easily browse everything you have to offer.
Tip: This style of setup works best when you have weatherproofed sides. If not, the first rainstorm that hits will most likely saturate some of your product.
Placing your product and using breaks
A good idea here is to organize your products into sections: 500-gram repeaters, artillery shells, fountains, etc. Doing so will give your consumers are clear picture of what’s where.
Once you have your product layout in place, it’s time to decide where you’re going to put “breaks” between sections, which are small collections of firecrackers, novelties or assortments that break up the shopper’s experience and appeal to their impulse.
For example, build your 200-gram repeater section, then place a basket filled with a novelty item like ground blooms or snap-and-pops, then continue to your 500-gram repeater section. This breaks the flow of thought and makes your customer consider a different set of items. The display can be small, and does not have to be expensive at all, but its affect on the shopping process can be large.
Here are some classic products to put into your breaks:
- Mini 10-ball Roman candles
- Ground blooms
- Flashing signals
- Smoke balls
- Small firecracker packs/boxes
Using sales and offers to encourage spending
Heading to a fireworks tent can be a bit of an intimidating experience for buyers. They show up with cash in hand, but they might get overwhelmed by all the different types of products available. This is where “sale” offers can break down their hesitancy and put them in the buying mood.
Try featuring a buy-one-get-one-free or a “first one is $2” offer to encourage spending. Sometimes all your customer needs is a little push to drop their guard and be willing to shop more freely.
One Last Shot
Think back to the last time you went to Target or Walmart. What types of products did they offer at the register? In our local Walmart, you’ll find candy, soda, baseball cards, lighters and all kinds of little stuff.
Your local retailers know how shoppers work. They include those small items to encourage you to buy a few final things to round out your purchase.
The same rule applies to your fireworks stand. The checkout is the last place they see before they leave. In this area, feature high-margin, low-priced items that appeal to young and old alike.
Baskets or buckets packed with display-break items or novelties are great little packages your customers love to scoop up on their way out.
Choosing the right product is a matter of research and retail know-how:
- Figure out what your customers want and then create a tiered pricing structure that offers high-, medium- and low-priced products.
- Get a good sense of the demographics of the neighborhood surrounding your retail space.
- Once you’ve got your product and pricing in place, pay close attention to how you organize your retail space.
Now that you’re an expert in choosing product, you’ll need to figure how to choose your employees. We’re going to address that in the next part of our series on running your own fireworks stand.
If you have made it this far and are still interested in starting your own fireworks business, you can complete our reseller application here.