By Dave Kahle

How do You Provide a Solution when Selling a Commodity?

Question:  How do you provide a solution when selling a commodity?

Answer:  Great question.  On the surface, it seems almost like a contradiction in terms – “If it’s a commodity, how can it be a solution?”

Before I begin, let me suggest you go to my website and read the article entitled, “Selling Commodities.”

One of my clients sells what might be the ultimate commodity – petroleum products.  We’re talking glitzy stuff like diesel fuel and gasoline here.  Honestly, not a whole lot of snap and sizzle with those products.  Yet they have expanded their business by millions of dollars and literally hundreds of customers in the past few years – without significant discounting.

How can that be?  Because of a mindset.  If you are going to become successful at selling commodities, you must embrace the same mindset.  The mindset looks at all the issues surrounding the commodity product as the benefit and the solution, not the product itself.

For example, you may be selling sawdust.  It’s the same sawdust that two of your competitors sell.  All three of you buy it from the same sawmill, at the same price.  Your customers order it by the truckload from you.

How do you create a solution out of sawdust?  Look at all the issues surrounding the sawdust.  Can you deliver it quicker or closer to the end-user than everyone else?  Maybe everybody else dumps it in pile, and you offer to put it in the bin from which the customer retrieves it.  Result?  You have saved the customer a step in his process, thus saving him money by looking at the delivery of the product, not the product itself.

How about packaging, warranties, terms, billing, the way they order the product, etc.  All of these can be customized for the individual buyer, resulting in higher value to that customer, and a reason to buy sawdust from you instead of the competition.

The customer’s decision to buy a product is never based solely on the product itself.  Lots of factors determine what they buy and from whom they buy it.  Add to the list above such things as the history between the two companies and your personal relationship, and you get a sense of what you can customize to create a solution for your customer.

In addition to thinking about everything surrounding the product, focus on digging deeper with the customer.  Those of you who have been through my seminars will understand what I mean when I say “peel the onion.”  Find out how the customer is storing the product, how they are using it, what they are using it for, what problems they have moving, packing, mixing, etc. the sawdust.  Dig in and learn more.  Find some pain you can eliminate.

You might discover, for example, that one of your customers dyes the sawdust red and compresses it in blocks to use as a component in their fireplace starter kits.  Offer to deliver pre-dyed sawdust.  Save them a step in their process, reduce their costs, and you’ll turn your commodity into a solution.

So, the next time somebody says, “What’s your price on sawdust?”, you say, “It depends on a lot of variables.  Help me understand how you are using it, and I’ll be able to design an accurate quote for you.”  And then start digging deeper.

Got the idea?  Quit thinking about the product and think about everything around the product.  Quit thinking about your competitors, and dig deeper in the customer’s process and pain.  Put the two together and you’ll create a solution.


Copyright MMXXI by Dave Kahle

All Rights Reserved

Originally published: Selling Commodities | Dave Kahle Wisdom