Retail Ready: Enhance Your Branding, Fundraising With Nonprofit Merchandising

The merchandising guide
Before implementing a strategy, however, an organization has to determine if merchandising is even a viable option, and a key part of that is remaining true to the nonprofit’s roots.

“Fellow nonprofits considering adding this element to their operations should make every effort to ensure that doing so will in no way detract from their mission, but will rather enhance their ability to serve those in their care,” said Stutts.

Once it’s been determined that embarking on a merchandising division won’t inhibit the mission, the next step is to get the entire organization on board. Howell noted that everyone must believe strongly in merchandising and not be embarrassed about the organization’s efforts to raise funds this way.

“Don’t bury your store in the back. Let it stand out,” Howell advised. “A lot of research we’ve done, the retail experience is the second most popular reason people come to our museums. So believe in it from the top down, mold it into the mission of the organization, and don’t hide the fact you’re looking to raise funds by providing merchandise to visitors.”

Howell and LeBlanc also said that, from there, the key is to run this retail/merchandising division like a business. That means operating with a normal profit and loss statement, inventory management, assortment planning and more. For instance, the Smithsonian builds each business element for each individual store—a budget, a profit and loss statement, product categories, profit and income level. It’s an intensely involved process, not an addition that you can put in place and forget about. Investments must be made, and management takes real resources.

LeBlanc laid out two critical merchandising steps:

1. Have a realistic understanding of capacity and timeline.
2. Create a standardized approach to going to market.

The first part requires taking a step back and having a strategy in place that tackles all the details. A nonprofit must understand the product categories and areas it would like to be involved in and the type of retail environment that will attract its target audience. It also needs a plan for buying and selling merchandise.

“Do the research up front,” said LeBlanc. “You have to have real buy-in across the organization, because it will take you at least 24 months to start to build a program from the time of strategizing to talking partners, vetting them, developing products and getting to market.

“You have to remind people this is a process that has to take this long, and you have to make sure people are committed to the process—the right process—and not asking in six months why products aren’t in the market.”

The second part centers on standardizing all aspects of this process. Develop templates for the proper partners, products and contracts—as much as possible to be fully prepared.

“It’s a retail business. It’s hard day in and day out,” Howell said. “You have to have a never-ending focus on serving the individual the 
right merchandise at the right price. It’s not a slam dunk.”

That’s why Howell recommended that any nonprofit considering entering the retail space talks to a consultant, studies retail trends 
and understands the real opportunities for the nonprofit.