Retailers long ago discovered that consumers will buy large volumes of staples if the discount is enough to justify the "warehousing costs" of having 120 rolls of toilet paper on hand.
And Institutional Size packaging has long been a standard. Think 55 gallon drums of Tide for hotels and the like.
The new growth area in packaging is in the very very small. Households in "Bottom of the Pyramid" economies (previously known as "Third World") don't have the cash to inventory a weeks worth of groceries, so you can't discount a twenty pound bag of rice enough to make a sale.
But if you can build a system to deliver single use amounts of products- one meal's worth of cooking oil, a single shot of shampoo and conditioner- billions of consumers can improve the quality of their daily life while you extend your brand into places it was unknown or too expensive since it only came in 16 oz bottles.
Rather than make a dollar on one transaction you will make a nickel fifty times.
Too often we look at the size of the budget, rather than the willingness to pay. Can you meet each budget that is willing to pay?
Peter
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