What’s In Your Catalog’s Future?

Product introduction and retirement rates will increase in velocity; new products will be cycled at much faster rates than I presently experience. The product masters of the future will be fast, bold and change-driven, and product will emerge as “king.”

Margins Matter

Sixth, high-margin niche catalogs will command extraordinary values. As margins continue to erode as a consequence of dynamic pricing and online price comparison, catalogs with high-margin products and dominant market penetration will achieve valuations significantly higher than the four to six times EBITDA (earnings before interest, taxes, depreciation and amortization) routinely seen in 2000. The unusually high valuations of pre-washout dot-coms will reappear when high-margin, dominant catalog businesses are recognized for their future earnings potential and their inherent experiential value. However, this is not the time to be a “me too” or a commodity catalog. Margin is still the fundamental pillar of catalog success.