How to make a product plan -Ultimate Guide to Product Planning.

How to make a product plan -Ultimate Guide to Product Planning.

by Trudi Roach

How to make a product plan: The Importance of product planning

Creating a new collection is one of the most exciting things you will do as an entrepreneur.

Whether you are developing pieces of clothing from scratch or picking styles from a vendor, putting together a group of products is why you launched your business in the first place.

Developing new collections was one of my favorite times each season when I developed clothing for a brand. The product team would start every new assortment with a theme, a specific seasonal direction, or a color and fabric idea.

But until we had reviewed the product plan (or merch plan) we didn't have the guidance needed to start developing or finalizing styles.

And I can't tell you how many times I've spent hours in a room full of designers, choosing fabrics, picking buttons and trims, dreaming of silhouettes, and creating the next big thing, only to have all those ideas end up in the trash can!

If the product plan wasn't in place to guide the process, those ideas might not fit into the business needed. Those designs might not be the right style, price, or category necessary to drive sales for the upcoming season.

What good is a green sequin pant if you sell denim midi skirts all day long?

The truth is if you don't start with a solid product plan, having so many great ideas for your business can quickly become a source of overwhelm.

So how do you pick the right products?

What do you add after you sell out an existing product?

You’ve already launched, but now what?

If you've ever asked yourself these questions, you're in precisely the right place.

I will break down what a product plan looks like for your business as you're starting out and how to maintain one and adjust it as you grow your business.

You'll discover what you need to know, so you don't see your products taking over your life, living room, and sanity!

How to make a product plan: What is it & How to Create One the Right Way?

A product plan is a simple roadmap that lays out what you're selling in a few categories. Those categories include basic or core products that are simple everyday styles that form the base of your business, Key items that expand your collection, and fashion pieces to offer something exciting and new each season.

Think of a Product Plan as step one of your business plan: it's the "what you're going to sell, how much inventory, and what it costs" for both you and your customer.

Your Product Plan needs to address these three product tiers, regardless of what you sell and how you position your brand in the marketplace among competitive brands.

So, whether you sell $20 tee shirts or $500 necklaces, you'll need a product plan that's right for your business.

How to make a product plan: How to plan a product roadmap.

Here's what to consider when you create a product plan for your business.

Think about those basic or core styles that you have in your current assortment that you're currently selling.

Core items can be the least expensive pieces in your store or website or just the simplest, easy to wear or use, so your customer's purchasing decision is easy.

Core items drive repeat purchases…think face wash or the white tee.

Core products should be priced so they generate healthy profit in every sale and are items that do not need to go on sale each season!

Do you have inventory in those styles so you can make sales every day and every week?

That inventory doesn't have to be large, just enough so you can consistently make sales and you don't sell out of your best colors.

Think of Gap and the white T-shirt; they would never want to be out of stock on that item.

Within your Product Plan, Core Items might make up 40% of the styles or be planned to generate 50% of the sales for your business.

Once you have your core products figured out, it's time to plan some Key items for the next season or two.

ACTION STEP: Identify your Core Items – what do you want to keep in stock every day?

Key items are the styles that you add in a new season that are more interesting than basics. These styles often have a slightly higher price tag, and more style details, and are closely tied to the season they launch in.

Key Items drive MORE sales and multiple purchases.

Keep the number of Key Item styles small and manageable.

When you are just starting out, your Key items can be novelty versions of your core styles.

Plan out Key item styles so you don't buy too much or too little inventory. This inventory should last you through a season, but it’s OK to sell out towards the end. In fact, that’s actually preferable.

Think fuzzy sweaters! You wouldn’t want that inventory hanging around the following March when the new tank top styles.

You'll need to think ahead a little bit to make sure that you can make or find a vendor to supply the product you need. Key items can be related to seasons, such as a holiday style, a gift-giving set, or other unique products that you can create some marketing activity around for a specific time or date.

If you’ve ever walked into your favorite department store and run right into a large display table of ‘must-have’ Holiday sweaters, you’ve seen a Key Item.

Or perhaps a GAP sundress in 4 colors and 2 floral prints, that’s a key Item.

Key Items can be harder to spot online. But every brand has its own.

If you look carefully, you’ll find them.

Zara high waist pant in 7 colors? Key item!

Mango fine gauge sweater in 4 colors? Key Item!

Everlane Men’s performance short in 4 colors? Key Item?

Within your Product Plan, key Items might make up 50% of the styles. Or depending on the size of your business they might be planned to generate 50% of the sales.

ACTION STEP: Identify how many Key Items you have in your brand.

Once you have these two essential tiers of your product plan in place, it's time to have some fun and think about the final category in your product plan, your Fashion Items.

Fashion items are like the cherry on top of your product assortment.

Fashion items are exciting, often higher-priced, limited edition, ‘grab your customers' attention styles that bring your audience into or back to your brand.

Pick one or two, or try a mini capsule collection of related fashion pieces and use them to generate excitement. Fashion or seasonal items are not meant to be around for multiple seasons, so this is the perfect time to experiment, try new things and have fun with your products.

Depending on what you sell, this fashion product tier might be called seasonal, luxury, capsule, novelty, or something similar.

It's OK to tell your audience and customers that these items are limited, that they will sell out fast or any other language that helps to create some urgency and excitement.

Fashion items often have a limited lifespan and they are perfect for promoting on sale at the end of the season to make way for new and fun items in your business!

How to make a product plan: How to update your product plan as you grow your business

Every season you will evaluate your current Product Plan.

First, think about adding new colors to your basics or key items. Next, ask yourself what will your Key Item(s) be in the coming season. And Finally, plan some new fashion styles.

In the fashion industry this is the EXACT order the merchandising team, and business leaders, think about products because it’s directly aligned with how the products drive RESULTS!

Updating basics might mean adding a new color, such as the Pantone color of the year or a seasonal stripe so a white T-shirt might also come in lime green or a sailor stripe.

If you are an accessory brand and last season's key item was a stackable bracelet set, next season's key item be a pendant necklace in five gemstone color options.

As your business grows over time, you will want to add to your core or basics and key items on an ongoing basis.

If we use the T-shirt example again, perhaps you add a tank top to your core T-shirt assortment. If you are a beauty brand, you might add a serum to your existing facewash and lotion in your skincare assortment!

Each time you add a product, think about which product tier fits into your business, how to price it and what type of quantity you need to think about carrying.

TIP: If last season’s item was really successful, consider adding the bestselling color back into your plan as a new basic!

CONCLUSION

So there have it.

Don’t waste another season on products that are not planned to get you results.

Create a product plan for your business today.

These are the three things you need to know about a product plan and how it can help you stay focused and strategically add products to your brand.

You know how to craft your product plan, so you can stay creative and plan which styles will get you the results you want for your brand.

PS: No Product Plan? Ready to figure out a Product Plan that’s right for your business?

You're invited to book a FREE call and get clarity on what's missing in your current Product Plan. Sign up for a call HERE!