What is merchandising? Merchandising is the art and science of presenting products in a way that maximises sales, builds brand equity, and delights customers.
As an entrepreneur, you need to know how merchandising differs from marketing and sales, what types of merchandising exist, and which tactics will convert browsers into buyers.
This guide explains merchandising from the ground up and shows you how to apply it in both retail and online contexts.
Merchandising refers to the presentation and promotion of products to encourage purchases. It includes everything from product assortment and pricing to shelf placement, signage, and visual displays.
The goal is to create a compelling shopping environment that increases conversion and average order value. Merchandising is different from marketing, which focuses on long‑term brand‑building and relationship‑building.
Marketing attracts demand. Merchandising converts that demand. Sales closes and services the transaction.
For example, an email (marketing) drives a shopper to a category page (merchandising) where sorting and product badges guide the add-to-cart. Sales completes payment and provides service after purchase.
What is the difference between merchandising and marketing? Marketing drives traffic, merchandising drives choice.
Founders should map these responsibilities clearly to avoid overlap and missed ownership.
Many founders confuse “merchandise” (the actual goods for sale) with “merchandising” (the strategy and tactics used to sell those goods).
What is merchandising? Merchandising encompasses the entire process of selecting products, setting prices, arranging displays, and managing inventory. In other words, merchandise is what you sell; merchandising is how you sell it.
This section gives an in-depth look at the various types of merchandising available to entrepreneurs:
Traditional brick‑and‑mortar merchandising involves store layout, shelf arrangement, end‑cap displays, promotional signage, and product sampling.
Retail merchandising aims to influence how customers navigate a physical space. Effective tactics include product demonstrations, promotional discounts, clear signage, and strategic product displays.
Online merchandising focuses on how products appear in search results and category pages. It includes keyword‑rich product titles, high‑quality images, product badges (e.g., “bestseller”), sorting rules, and personalised recommendations. Searchandising ensures that relevant products appear higher in search results, increasing visibility and conversion.
Platforms like Shopify make this easier by offering built-in merchandising tools, apps for product recommendations, and flexible category management, helping brands optimise both discoverability and conversion in one place.
This refers to SKUs that are designed and selected for a cohesive story, season, and price architecture. Fashion merchandising connects creativity with commerce, balancing trend-driven design and commercial viability.
It covers forecasting trends, line planning, seasonal drops, capsules, and the visual storytelling that brings collections to life. Success depends on aligning assortment with customer demand while staying ahead of the style curve.
Metrics matter: track sell-through by size curve, monitor style colorways, and manage depth versus breadth. For creators launching apparel or merch, strong fashion merchandising means translating runway ideas into retail-ready collections that resonate with buyers.
Commercial merchandise refers to products positioned for wholesale channels or B2B buyers. Unlike consumer-facing merchandising, this focuses on trade presentation and operational efficiency.
It involves creating line sheets, setting minimum order quantities, and tailoring assortments for showrooms or marketplace listings. Pricing tiers and standardized packaging help streamline purchase order approvals and build retailer confidence.
Founder tip: provide samples alongside storytelling decks; this combination closes buyers faster by showcasing both product quality and brand narrative.
A merchandiser bridges creativity and commerce. Their job is to make sure the right products reach the right audience, at the right price, and in the right setting. This role blends market analysis, storytelling, and financial discipline.
In startups, merchandisers often double as founders, learning to balance vision with data to grow sales sustainably.
A merchandiser wears many hats depending on the size of the company. Core responsibilities include:
For startups or small teams, the merchandiser may also be the founder. The key is balancing creative vision with data‑driven decisions. Focus on understanding your customer deeply, testing small assortments, and iterating based on feedback.
When people ask, “What skills does a merchandiser need?” The answer blends analysis, creativity, and discipline. A merchandiser must be comfortable working with data in Excel or BI dashboards, be able to spot trends, and calculate margins quickly. At the same time, they shape creative direction by guiding visuals, product copy, and the way assortments tell a story.
The role also demands operational rigor, from managing purchase orders to monitoring lead times and supplier follow-through.
The toolkit extends across both retail and digital environments. POS or ERP systems track performance and inventory, while planogram software helps design in-store layouts. In ecommerce, platforms with built-in merchandising features and A/B testing tools provide the feedback loop to refine product positioning.
On a small team, the merchandiser’s day often follows a predictable rhythm. Mornings begin with a review of sell-through data, scanning for fast movers and slow sellers. Midday shifts to content updates, ensuring product pages and visuals stay fresh. By afternoon, attention often turns to vendor calls or follow-ups with suppliers to confirm production schedules and delivery dates.
Weekly rituals give structure. A SKU health check highlights assortment gaps or overstock risks, while a promo calendar review keeps marketing and merchandising in sync. Even without a large team, a founder can set up a one-page dashboard to track sales, inventory, and promotional results in real time.
For those bootstrapping, carving out a dedicated “merch hour” twice a week creates the discipline needed to make consistent, data-driven adjustments without losing focus on the bigger vision.
Good merchandising drives measurable business benefits. When products are presented effectively, customers find what they need faster and are more likely to buy additional items.
Proper merchandising leads to increased sales, better customer satisfaction, longer time spent in store, faster inventory turnover, and increased brand recognition.
Merchandising helps retailers create engaging shopping experiences, encourage impulse purchases, and optimise inventory turnover. In e‑commerce, strong merchandising increases add‑to‑cart rates and average order value (AOV) by showing relevant items at the right moment.
Merchandising shapes conversion by reducing friction. Relevance tools like sorting and product badges guide shoppers to the first click faster.
On product detail pages, clarity matters most; sizing charts, comparison tables, and social proof reassure buyers at the moment of decision.
Simple experiments, such as testing default sort by “top-converting” versus “new,” can reveal what drives action, and heatmaps or session replays validate whether these changes truly improve customer flow.
Average order value rises when merchandising encourages bigger baskets. Bundles, “complete the look” suggestions, and threshold shipping nudges make shoppers add more without feeling pressured.
Price anchoring and good/better/best ladders also frame value effectively. Post-purchase cross-sells can extend revenue, provided they don’t disrupt the user experience.
Returns shrink when product content is precise. Dimensions, fabric details, and compatibility notes set clear expectations, while fit finders or FAQ blocks help shoppers choose correctly.
Tracking the top reasons for returns and addressing them with better photos or descriptions reduces waste. Looping in customer service feedback ensures the fixes address real pain points.
Merchandising also builds brand equity. Consistent visuals across channels reinforce professionalism, while storytelling explains price and craftsmanship.
Certifications, sustainability claims, or sourcing details strengthen trust further. Promo calendars should be carefully managed; too many discounts risk training customers to undervalue the brand.
Below, we share strategies that you can put into action immediately:
Effective merchandising starts with balance. Depth versus breadth must be managed so that underperforming styles can be cut to fund top sellers.
Good/better/best pricing tiers create clear value jumps, while hero SKUs drive traffic and margin-friendly add-ons lift profitability. Regularly reviewing size and color curves prevents broken assortments that frustrate shoppers.
The first impression matters. Lead with the most wanted item above the fold, supported by authentic social proof. Apply visual principles like rule of thirds, color blocking, and negative space to guide attention.
Limited-time banners should tie directly to inventory goals, while each hero image benefits from a short caption explaining why it works.
Plan around key retail moments and protect margin by layering smart promotions.
Pre-launch waitlists and countdowns build anticipation, while pairing slow movers with fast sellers helps clear inventory. After each campaign, use a post-mortem template to recap performance and refine future strategies.
Search and on-site discovery deserve constant tuning. Adjust synonyms and create fallbacks for zero-result queries to capture intent.
Test different badge language such as “bestseller,” “top-rated,” or “low stock” to see what resonates. Heatmaps and funnel metrics reveal priority changes, and documenting both wins and losses ensures learnings can scale.
Building a measurement culture keeps merchandising accountable and repeatable. The goal is not to track everything, but to focus on a handful of signals that guide weekly decisions. Key merchandising KPIs are sell-through, gross margin, add-to-cart rate, and conversion by category. Separating retail and ecommerce metrics avoids confusion and helps founders compare performance cleanly. A simple dashboard with targets for each metric ensures alignment across the team.
Financial discipline is the foundation. Sell-through, gross margin, GMROI, and stock turns show how efficiently products move and profit is realized. Sell-through rate shows how quickly products move, calculated as units sold ÷ units received × 100; for example, selling 75 of 100 sweaters gives a 75% sell-through, with anything above 75% considered strong and lower rates pointing to overstock or weak demand.
Inventory turnover ratio tracks how often stock sells and is replaced, using COGS ÷ average inventory, where high turnover signals efficient cash use and low turnover suggests excess stock. GMROI, or Gross Margin Return on Investment, measures profit per dollar of inventory by dividing gross margin by average inventory; a result like 3.33 means earning $3.33 for every $1 invested, with anything above 2 typically healthy.
Digital merchandising requires close monitoring of user behavior. Click-through from category to product detail pages, add-to-cart rate, and search conversion highlight where shoppers meet friction.
Segmenting by device and traffic source sharpens insight into performance gaps. Cohort or path analysis validates changes, while a weekly note on the “biggest mover” keeps teams engaged in learning what’s resonating.
Health checks at the category and SKU level ensure balance. Contribution margin by category and rank exposes profit drivers. Cannibalization flags show when two SKUs compete for the same need, eroding returns.
Tracking attachment rate for bundles or accessories points to upsell potential. Running an ABC/XYZ analysis helps prioritize attention, focusing resources on the products that matter most for growth and stability.
Technology makes merchandising more manageable. Consider using:
Provide real‑time sales data, inventory levels, and customer profiles. Cloud-based POS solutions integrate with e-commerce platforms and can suggest reorders based on sell-through rates.
Shopify, BigCommerce, or WooCommerce offer built-in merchandising features like product sorting, personalised recommendations, and search filters. Use these tools to implement searchandising best practices.
Tools like Google Analytics, Klipfolio, or proprietary dashboards help monitor conversion, traffic sources and sales by SKU. Lightspeed’s analytics platform, for example, provides demand forecasting capabilities to recommend re‑order quantities based on sell‑through rates.
Use market research tools (SBA market research guides, competitor analysis) to validate demand and understand your target customer.
Identify the “job” your product solves and how it fits within existing assortments.
Decide on the number of SKUs (sizes, colours, versions) and set price ladders that cover entry, mid, and premium tiers. Ensure that your gross margin allows for promotions and overhead.
Create high‑quality photos or mock‑ups. Develop product descriptions that speak to the customer’s lifestyle and include relevant keywords.
For physical stores, plan window displays or endcaps that highlight the product’s unique features.
Introduce the product to a small segment of your audience (newsletter subscribers, social followers) or through a limited release.
Gather feedback on fit, quality, and price perception. Use this to fine‑tune before the full launch.
Make sure to track KPIs (sell‑through, turnover, GMROI). If the product underperforms, adjust pricing, photography or placement. If it sells out quickly, increase order quantities or expand the range (new colors or variants). Document what worked and use those insights for future launches.
What are common merchandising mistakes? Every brand makes them, especially early on, but quick fixes can prevent costly habits. The big four: over-assortment, weak navigation and search, promo whiplash, and thin product detail pages. Founders can address each with focused changes this week.
Too many SKUs confuse shoppers and lock up cash. Trim to winners, bundle slow movers, and set exit discounts with clear rules. Use contribution margin and stock turns to guide cuts, then reinvest freed cash into the top 20% of products.
Poor discoverability blocks conversion. Add synonyms and common misspellings, build attribute-based filters, and put the most popular options above the fold on mobile. Review zero-result queries weekly and fix them fast.
Constant discounts train customers to wait. Set promo guardrails and a calendar that protects margin. Use messaging about materials, durability, or sourcing to justify price, and document outcomes so mistakes don’t repeat.
Shallow product pages drive returns. Add detailed specs, size guides, compatibility notes, and lifestyle photos. A short FAQ tackles common objections, while care instructions reduce post-purchase issues.
Merchandising shows up in everyday founder decisions. Here are quick scenarios across ecommerce, marketplaces, retail, and fashion drops. Each shows what was done, why it worked, and how you can adapt it.
Feat Clothing launched a standout product made with their “Buttery Blanketblend” fabric, which became their hero SKU. Instead of continuously releasing many new SKUs, they built marketing around that one product: messaging, social proof, and repeat purchase behavior. This allowed them to focus, spend, and visibility on what already resonated.
What you can adapt: Identify your own hero SKU early. Push it in all channels, use it as the gateway into your brand. It reduces risk and concentrates your merchandising effort.
Product Bundling to Lift AOV
Brands like Harry’s and SuperGoop are using well-structured bundles (e.g., skincare sets, “essentials kits”) and upsells that are relevant to what customers already have in their cart.
Harry’s bundles by routine (“shave kit”, “shower routine”), while SuperGoop places best sellers or related items on the cart page. These strategies increase average order value and also help clear slower-selling items when grouped smartly.
What you can adapt: Build bundles around usage (not just price), test placing them in the PDP & cart, and measure uplift versus stand-alone purchases.
One DTC brand used the Influencer Hero platform to scale from $0 → $1.2M in revenue in a year. A part of their strategy was heavy creator/influencer content, but also optimizing product pages and conversion paths to capitalize on traffic. While specific merchandising layout details aren’t fully disclosed, the story shows synergy: strong product content + external demand + optimized onsite experience.
What you can adapt: If you have influencer or social traffic, make sure the product pages you send them to are fully optimized with hero SKUs, good copy, high-quality images, clear badges, etc., so you don’t leak conversion.
The “LV By the Pool” capsule by Louis Vuitton is a more traditional model but a good example of limited editions with strong visual story, curated items, and scarcity/seasonality baked in. These drops create demand spikes, justify premium pricing, and create branding momentum.
What you can adapt: Even if you’re smaller scale, test a micro-capsule: limit colorways, build a lookbook, use countdowns, and waitlists. Observe which pieces sell fastest and use that data to inform restock or future drops.
Merchandising is a powerful lever for entrepreneurs who want to move beyond making products to creating experiences.
By understanding the difference between marketing and merchandising, leveraging different types of merchandising, mastering data‑driven strategies, and tracking key metrics, you can influence customer behaviour and drive profitable growth.
Start small: audit your current assortment, optimise your top product pages, and plan a seasonal promotion. Measure results using sell‑through rate, inventory turnover and GMROI.
For solopreneurs, merchandising discipline is even more critical, since limited resources demand a sharper focus on hero products, efficient inventory, and promotions that deliver fast learnings.
As you iterate, merchandising becomes less of an art and more of a repeatable system that tells your brand story while boosting conversion and AOV.
Ready to dive in? Elevate your entrepreneurial game with actionable advice and inspiring interviews from high-level entrepreneurs, business owners, and overall badasses in the game. Get more insight and inspiration on our blog posts, podcast episodes, or invite-only community.
Merchandising means how products are presented, priced, and positioned to guide purchasing decisions. It includes retail merchandising strategies that align displays, assortments, and promotions so customers can easily find value and make confident purchase decisions across in-store and digital channels.
A merchandiser manages product mix, stock levels, and presentation to drive sales. In ecommerce merchandising, this involves curating product detail pages, optimizing search results, and tailoring recommendations, ensuring shoppers have clear options and compelling reasons to complete purchases effectively.
Visual merchandising illustrates merchandising through the design of attractive store windows or curated displays that highlight new arrivals or promotions. Online, it can be a homepage layout with cohesive product images, banners, and storytelling that inspires customer discovery and purchase.
The four types are product merchandising, digital merchandising, planogram merchandising, and omnichannel merchandising. Each type supports sales by shaping how customers experience products, whether through physical shelf layouts, online category pages, or integrated strategies that connect in-store and digital touchpoints.
The two main types are retail merchandisers and manufacturer merchandisers. Retail merchandisers manage product placement in stores or online platforms, while manufacturer merchandisers work with partners to ensure their products are prominently displayed, competitively priced, and supported with effective promotional strategies.
The rule of three encourages grouping products in sets of three for impact. This principle supports category management by creating balance and focus, making it easier for customers to compare and decide while increasing engagement and boosting purchase conversions.
Marketing builds demand while merchandising converts it. Marketing generates awareness and interest, whereas merchandising uses assortment planning, clear product displays, and strategic pricing to turn interest into transactions, ensuring the right products reach the right customers at the right time.
Fashion merchandising involves designing assortments that fit seasonal trends and customer needs. It uses pricing ladders to balance value and premium offerings, blending creativity with analysis to tell cohesive stories while ensuring profitability, competitive positioning, and consistent product availability across channels.
Commercial merchandise is designed for wholesale or B2B buyers. It often uses cross-merchandising in showrooms or catalogs, supported by line sheets, minimum order quantities, and packaging standards that help speed purchase orders while communicating brand quality and consistent value effectively.
An upsell and bundle approach is offering a laptop with a matching sleeve or skincare items as a complete kit rather than single purchases. This strategy raises average order value, improves customer satisfaction, and strengthens overall brand merchandising performance.
Alex Quin is a full-stack marketing expert and global keynote speaker. Founder and Chief Marketing Officer of UADV Marketing - a member of the Forbes Agency Council.
.jpg)
