Selling on Price versus Selling What People Love

Why volume of cheap product and considered purchases of loved product are two different businesses

Category:  Strategic advice — Range, margin and positioning

Audience:  Independent retailers: newsagents, gift shops and garden centres

Last reviewed:  August 2026

Purpose of this article

Every retailer chooses, whether deliberately or by drift, between two ways of making money: selling a high volume of cheap products that customers buy on price, or selling fewer, more expensive items that customers buy because they love them. While these may look like points on the same scale, they are not. They are two different business approaches, with different economics, different competitors and different futures. In this article we set out the difference so the choice is made deliberately.

Your choice is your choice for your business. Our goal here is to help you make your choice.

The maths: what each dollar of turnover is worth

Consider two items that could sit in the same shop. A $4 commodity line at a typical 40% margin returns $1.60 of gross profit per sale. A $65 gift or homewares piece at 50% returns $32.50 per sale. To earn $30,000 of annual gross profit:

Every one of those transactions costs roughly the same to serve: the labour at the counter, the ordering, the ticketing, the shelf space, the shrinkage. On a $1.60 margin, the cost of processing the sale can consume most or all of the profit. On a $32.50 margin, it barely registers. Volume retail is not a smaller version of considered retail. It is a treadmill that runs sixty times faster for the same reward.

Now with an item prices at, say, $450.00, the scale tips further. As it would if your GP for a cheap item was 75%.

Who you compete with

The price-driven customer is loyal to the price, not to the shop. The moment a supermarket, a big-box chain or a re-armed discount variety operator sells the same item for less, that customer is gone, and those competitors will always sell it for less. They buy in volumes an independent cannot touch, they run home brands to recover margin, and they treat the very categories independents dabble in cheaply, wrap, party goods, basic gifts, seasonal lines, as traffic bait. Competing with them on price is a race the independent enters already beaten.

The customer buying something they love is playing a different game. A piece chosen for a person they care about, a brand they collect, a maker they follow, is not price-compared in any meaningful way, because it is not available identically everywhere. Curation is the independent's structural advantage: the big operators cannot range for one town's taste, and a screen cannot let a shopper pick something up. When the product is loved, the shop is chosen for its judgement, not its price tag.

What each model does to the business

• Floor space. Cheap volume lines demand large space for small returns; gross profit per square metre is the measure that exposes them. Loved product earns multiples more per metre and rewards presentation rather than stacking.
• Cash and stock. Volume retail ties cash up in depth of identical stock that only moves on price. Considered retail ties cash up in breadth and newness, and stale stock is fixed by markdown of a few pieces, not pallets.
• Labour. Sixty transactions a day to earn what three could is rostered hours spent processing rather than selling. Considered retail turns counter time into conversation, add-on sales and relationships.
• Marketing. Price-driven retail can only ever shout about price, which trains customers to wait for discounts. Loved product gives a shop stories to tell: new ranges, makers, arrivals, occasions. That is what fills social media and shop windows with something worth looking at.
• Customer relationship. A price buyer compares; a lover returns, collects and tells friends. Repeat visits from people who love what a shop finds for them are the cheapest traffic in retail.
• Business value. A buyer of the business pays for defensible profit. Margin earned from curation and loyalty is defensible; margin earned by being momentarily cheapest is not, and it shows in what shops sell for.

Where cheap still has a place

This is not an argument for stripping every low-priced line from the shop. Impulse product at the counter, add-ons that ride along with a loved purchase, and entry price points that let a child spend pocket money all have a role. The distinction is purpose: cheap lines should serve the basket and the visit, never define the shop. The moment a shop's identity becomes "the cheap one on the strip", it has chosen the treadmill, and it has chosen opponents it cannot beat. 

This shop has no option but to remain cheap.

Making the shift

• Measure gross profit per square metre by category, and let the cheap volume categories defend their floor space with numbers.
• Buy for love: ranges chosen because the shop's customers will adore them, with stories attached, rather than because the carton price was good.
• Price for value, not against the chains. A considered purchase carries a considered margin; the customer buying what they love is not holding a competitor's catalogue.
• Retrain the counter conversation from processing transactions to helping choices: gift questions, occasions, wrapping, add-ons.
• Judge success by gross profit dollars and margin percentage, not by transaction count or turnover. Turnover from cheap volume flatters the top line and starves the bottom one.

Key takeaway: cheap product bought on price rents you a customer until someone cheaper comes along, and pays you cents for the privilege. Product people love earns twenty times the profit per sale, from customers who chose your shop rather than your price. Volume is a treadmill; love is an asset. Range, price and staff the shop for the business you actually want to be in.