What are the main disadvantages of the sale-on-return model for inflight retail and when can it be beneficial for your brand?

The sale-on-return model for inflight retail involves airlines purchasing goods from suppliers, which can then be sold to passengers during the flight. If the goods are not sold, they are returned to the supplier and the airline does not need to pay for them. While this model may have some advantages, it also has several disadvantages, including:

  1. Increased risk for suppliers: Suppliers are essentially providing goods on credit, with the hope that they will be sold during the flight. If the goods are not sold, the supplier may be left with excess inventory and the associated costs.
  2. A reduced incentive for airlines to sell: With the sale-on-return model, airlines may not have as much incentive to actively promote and sell the products, as they can simply return any unsold items. This could result in lower sales and revenue for both the supplier and the airline.
  3. Administrative costs: The sale-on-return model can be more complex and time-consuming for both suppliers and airlines, as they need to track inventory levels and manage the returns process. This can lead to increased administrative and transportation costs and reduced efficiency.
  4. Lack of flexibility: With the sale-on-return model, suppliers may need to produce goods well in advance of the flight, which could limit their ability to respond to changes in demand or market trends.
  5. Difficulty in forecasting demand: It can be challenging to accurately predict how many products will be sold during the flight, which could lead to either excess inventory or stockouts.

In-flight retail also offers benefits for brands:

  1. Increased brand exposure: By selling products on flights, brands can reach a captive audience of travelers who may be more likely to make impulse purchases. This can help to increase brand awareness and exposure, which can be especially valuable for new or lesser-known brands.
  2. Revenue generation: Inflight retail can provide an additional revenue stream for brands, which can help to diversify their income sources and improve their bottom line.
  3. Unique selling proposition: Brands can use the in-flight environment as a unique selling proposition for their products, highlighting the convenience and accessibility of purchasing items during a flight.
  4. Opportunity for premium offerings: Airlines often target higher-end customers with premium offerings such as luxury goods and services, which can help brands to position their products as premium and exclusive.
  5. Access to international markets: Inflight retail can provide brands with access to international markets, allowing them to reach a broader customer base than they may have through traditional retail channels.
  6. Partnering with airlines: Brands can form partnerships with airlines to offer exclusive promotions, which can help to build brand loyalty and drive sales.

Overall, the benefits of inflight retail business can vary depending on the brand and the specific products being sold. However, it can provide a unique opportunity for brands to reach a captive audience and generate revenue, while also building brand awareness and loyalty.


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