Take the guesswork out of product development and sales with these tips from folks who are doing it.

By Susie Boghosian and Jinny Fleischman

Merchandising at the Smithsonian

The Smithsonian Institution is a museum and research complex comprising 18 museums and galleries and the National Zoo, as well as research facilities. It offers a wealth of opportunity for product relatedness. From a child’s science kit to a replica of the Hope Diamond, there’s much to draw on. It’s a very mature organization, and its merchandising efforts continue to evolve. The raison d’etre that drives the development of new offerings overwhelmingly is education. The Smithsonian seeks to educate, create opportunities for interaction with its constituency on a variety of levels and generate unrestricted revenue.

One of the first products the Smithsonian created was Smithsonian magazine. First printed in 1970, it was the institution’s first effort at reaching a national audience. It also served as the base for the launch of the Smithsonian’s membership program and still serves as the primary benefit of membership. The articles and photography feature subjects you would expect to learn more about at the museum. The institution also publishes Air & Space magazine.

After the creation of Smithsonian magazine, the Smithsonian developed products with outside manufacturers and offered them for sale in the institution’s retail stores, on its Web sites and in the general marketplace. One of the most successful licensed products has been a reproduction of George Washington’s wine coaster The original, which Washington used at Mount Vernon in Virginia, is on exhibit at the National Museum of American History.

Another successful series of products are Smithsonian-approved science kits that offer children the opportunity to build a volcano or a crystal radio, or to learn more about the weather.

Within many of the Smithsonian museums you’ll find various stores offering visitors travel needs such as film and rain ponchos, a complete line of logo products to better remember their trip to Washington, books, posters, gifts, jewelry, and other collection-oriented products that relate to the museums.

The Smithsonian Catalogue offers product adaptations and reproductions through a printed catalog and an online store. The catalog is mailed to a national audience of previous customers and prospects. Each product is delivered to the customer accompanied by an information card identifying how that product is related to the Smithsonian and its collections.

The Web site, www.smithsonianstore.com, offers all the items the print catalog features, as well as boutiques that highlight many of the licensed products the Smithsonian offers. It also serves as a clearance opportunity for overstocked items.

Most of the merchandising efforts of the Smithsonian operate under the auspices of Smithsonian Business Ventures, which also includes the operation of concessions in the museums and the Smithsonian Journey’s program, offering educational tours. The Smithsonian also is one of the few organizations to operate three IMAX theaters.

In total, the Smithsonian’s effective merchandising programs have engaged its constituency, created relationships where none existed, expanded its reach and generated revenue. — SB and JF

Face it … life is not a Bob Hope movie. And just as a family of adorable tots can’t really make it in show business anymore by punching the air and yelling, “Let’s put on a show,” gone too are the days of, “Let’s have a catalog!” in the not-for-profit world.

Having a merchandising program is one way for many nonprofits to raise unrestricted funds and to reach donors and prospects at a time when their mailboxes — both physical and virtual — are crammed with philanthropic requests. Properly undertaken, it can enable the nonprofit to increase its visibility in a positive way.

But such programs shouldn’t be undertaken lightly. A good deal of thought and effort needs to go into creating a merchandising program that reflects well on the organization. It’s all too easy for a poorly conceived or executed plan to damage a nonprofit’s reputation.

The first thing you, as an organization, need to decide is whether you want to create an actual merchandise business or simply sell some products to generate an additional source of revenue.

The distinction is an important one. If you want to actually create a business, you’ll have to establish a real infrastructure to handle the task. If that’s the case, you need to be able to answer “yes” to all of the questions below. If you answer “no” to any questions, you should take the necessary steps to turn that no to a yes before proceeding. These questions include:

* Is there a raison d’etre — other than raising money — to undertake this business? Just wanting to create funds isn’t enough. A merchandising program must have a tie-in with the organization.

* Is there a strong internal commitment from top management to support a business strategically, financially and emotionally?