When new products are introduced to the market, retailers have to decide which ones to stock on their shelves. This can be a tough decision, as there are many factors to consider. In this blog post, we’ll take a look at the three main factors that influence a retailer’s decision to stock a new product. We’ll also see how these factors can be used to your advantage when pitching a new product to retailers. Finally, we’ll touch on some other considerations that retailers take into account when stocking new products.

Key Factors When Deciding Which New Products to Stock

Before a new product hits the shelves, retailers have to decide whether or not to stock it in their store. This decision can be influenced by many factors, such as the product’s target market, its price point, and its shelf life. In this blog post, we’ll take a closer look at three of the main factors that influence a retailer’s decision to stock a new product:

1. The product’s target market

2. The product’s price point

3. The product’s shelf life

The Product Target Market

When new products are developed, it is important to consider the target market. This requires an understanding of who is most likely to purchase the product and why. For example, a new type of toothpaste may be designed for children. In this case, the target market would be parents with young children. The packaging and marketing materials would be designed to appeal to this group. Similarly, a new type of dog food would be targeted at pet owners. The retail shelves would be stocked with this new product in locations where pet owners are most likely to shop. Understanding the target market is essential for ensuring that new products are successful.

The Product’s Price Point

For new products, the price point is always a key consideration. Too high and consumers will be unwilling to take a chance on something new; too low and the product may be perceived as being of poor quality. In addition, the price point must be competitive with other similar products on the retail shelves. A new product that is significantly more expensive than its competitors is unlikely to gain market share, while a new product that is priced too low is likely to generate little profit for the company. Thus, finding the right price point for a new product is essential for its success.

The Product’s Shelf Life

When customers purchase new products, they generally expect them to have a long shelf life. However, the shelf life of a product can vary considerably depending on the type of product and where it is sold. For example, new clothing items often have a shorter shelf life than other types of products because they go out of style quickly. Similarly, new food items generally have a shorter shelf life than other types of products because they expire more quickly. However, new electronic items often have a longer shelf life than other types of products because they continue to work properly for many years. Ultimately, the shelf life of a product is determined by numerous factors, including its type and where it is sold.

Optimizing Retailer ROI Through New Products Selection

Retailers judiciously select products that not only fit within their budgetary constraints but also make the best use of limited shelf space. This involves analyzing sales data, understanding market trends, and predicting future consumer behaviors.

It should come as no surprise that the ROI calculation extends beyond simple profit margins. It includes factors like the cost of holding inventory, the rate of stock turnover, and the opportunity cost of not stocking alternative products. Retailers consider these elements to ensure each product stocked contributes maximally to overall profitability.

Harmonizing Margin with Product Turnover

There’s more to it than just ROI calculations.

  • Evaluating Margin vs. Turnover in Different Categories: The balance between margin and turnover can vary significantly across product categories. For instance, luxury items might have higher margins but slower turnover, while everyday commodities might have razor-thin margins but high turnover rates.
  • Consumer Trends and Seasonality: Retailers stay attuned to changing consumer trends and seasonal variations, which can dramatically affect product turnover rates. Therefore, stocking decisions are flexible enough to adapt to these changes to maintain optimal ROI.

Advanced Strategies in Retail Stocking Decisions

  • ROI Across Diverse Products: Achieving a consistent ROI requires a deep understanding of different product dynamics. Retailers usually conduct regular reviews of product performance, considering factors like customer feedback, competitive pricing, and market demand shifts to make the choice.
  • Margin for Different SKUs: Retailers also develop tailored margin strategies for different SKUs, considering factors like bulk purchase discounts, supplier relationships, and inventory turnover rates. This approach ensures that each SKU contributes effectively to the store’s financial targets.

Aligning Product Stock with Consumer Purchasing Behavior

 Identifying and leveraging products that act as primary reasons for store visits can significantly boost overall sales. Retailers usually analyze purchase patterns to identify these key products and strategically place related items to encourage additional purchases.

Retailers also aim for a diversified product portfolio that caters to a broad spectrum of consumer needs. This includes balancing high-demand, low-margin items with niche, high-margin products, ensuring that the store appeals to a wide customer base and maximizes overall profitability.


If you’re looking to pitch a new product to retailers, it’s important to keep these factors in mind. By understanding how retailers make stocking decisions, you can increase your chances of getting your new product onto store shelves.

When deciding whether or not to stock a new product, retailers will also take other considerations into account. These include the product’s packaging, the space available on store shelves, and the retailer’s return policy. Keep these factors in mind when pitching a new product to retailers, as they can make or break a deal.

Pitching a new product to retailers can be a daunting task. But by understanding how retailers make stocking decisions, you can increase your chances of success. Keep the factors we’ve discussed in mind when making your pitch, and you’ll be one step closer to getting your new product onto store shelves.

If you’re looking to launch a new product in retail stores, Retailbound can help. We offer a wide range of services to manufacturers, from product development and packaging to shelf space planning and retailer relations. Contact us today to learn more about how we can help you get your new product onto store shelves.