We were told for many years that at Ziplongs® for children would be genius, and many customers asked us to make one. We were convinced, so we developed a version for kids and expected instant success.
This expectation turned out to be very wrong. Since we launched the product two years ago, we have only sold around 100 Ziplongs® kids. The rest (close to 400 products), are still at our warehouse. What do we do now?
In general, we are against discounts, and we never have sales to get rid of products that are "outdated". But in this situation, it is clear that we won't continue to produce this product, and the environmental damage is already done. Letting the products gather dust at our warehouse costs us a substantial amount of capital. As CFO of the company, I can't let this happen – it's a tough dilemma.
It costs us 205 NOK (ex. taxes) to make a Ziplongs® kids. Originally, we sold them for 400 NOK (inc. taxes). I have now decided to cut the price to 260 NOK (26 Euro). Really, this means we lose a little bit of money, but it's better that people use the product than the alternative. We now hope that this will contribute to many more children being able to play in our Ziplongs®!
P.S. We hope you like our honesty and are interested in reading about challenges like these. This is a good example of how the clothing industry works. A few people in a company have to pretend to be psychic and guess (far in advance) what and how much people want of a product. Many products end up never selling, and in the end are sold at huge discounts (where the company loses money), or at worst are thrown away. We don't want to be a part of that, so we're changing our business model. Stay tuned the next few months!