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Product customization doesn’t cost you money. It makes you money.


In the wake of COVID-19, your unsold inventory is not (unfortunately) like a fine wine: it’s not getting more valuable with age. The sales you’ve lost—particularly with highly seasonal product—are yet another indication that you should be aggressively exploring product customization as an integral component of your product mix.

A common mistake is viewing product customization as simply a marketing expense, requiring enormous investments of time and money. But properly done, a product customization program can be a significant engine of profit. Here are three ways that product customization boosts your bottom line:

1. Price premium.

Consumers are willing to pay an average 15-40% more for products that they’ve personalized, even when the cost of the personalization is negligible (for example, embroidering their initials on the product) or non-existent (exchanging one color for another).

2. Reduced discounting.

It’s nearly impossible to maintain starting gross margins throughout the season. Gross margins typically fall by about 20% when closeouts are factored in. By making slow moving inventory available for personalization, brands can avoid the need to discount. That’s not only a financial win, it avoids cheapening your brand with off-price products in the market.

3. Avoid double marginalization.

Depending on the industry, selling direct to consumer is usually twice as profitable as selling through retailers, either brick and mortar or online. Custom products are sold at full retail price (or higher), allowing the brand to capture the difference.

Beginning a product customization program does require some initial investment. However, you can start small—you don’t need the same kind of full-blown capability that you see in Nike By You (formerly NikeID). You can start small and still reap significant financial benefits.

Want to learn more? Please contact us. We are here to help!