How to boost retail sales Issue 01: Expanding Product Lines
Diversifying your business’s product assortment is a sure-fire strategy that can uplift your brand’s profits by a huge percentage. It’s no secret that the business gigantic, Amazon, grew into the mega successful version of itself that it is today by adding new products to its range. It was initially a book retailer that later on kept adding more and more products to its arsenal.
Product diversification, depending on the approach that is taken toward it, can increase revenue immensely. Huge and small businesses, alike, can benefit greatly with this move. Big companies have skyrocketed their sales by using this tactic; finding a gap in the market and filling that gap by expanding their product line.
What makes it so preferable?
Diversifying products is a smart strategy due to several reasons. Through it, you can monetize on current reputation and sales. When your business sells more products, it can better compete in the market. You can divide risks and build more sales.
As you expand your product range, you’ll be able to make way into a newer market which is a guaranteed advantage. When your business is able to cover a larger segment of the market, profits are bound to rise. This might also increase the value of your business and in turn, your market share.
More customers are easily attracted, and existing customer loyalty is also ensured. In fact, as the different needs of present customers are met, a new audience is reached automatically without having to invest in further resources.
A point to bear in mind here is that for your business to reap these merits you need to conduct detailed research. Poor choices can lead to pricey downfalls. For starting out, take baby steps, gain customer insights, assess your competition. Do your homework. If all is well and good, varied products should definitely improve your profits and help your business move in a more prosperous direction.
The different modes of product expansion
A business can widen its product scope by three methods.
1. Coming up with a whole new innovative product
This one can be tricky and relies on a whole lot of factors. One wrong move and expected profits can turn into losses.
Introducing a whole new product can help your company sneak its way and spread in a whole new market segment. For instance, if you are a seller of skincare products by expanding into processed foods you can make a place for yourself in that area as well. A new product that has points over its competitors enables you to multiply your profits. Also, the profits you make by establishing a new product can substitute for the failure of other product ranges.
When you launch an entirely different category, you require more and more suppliers. But reliable suppliers are difficult to acquire. It takes centuries to find suppliers and build trusted relationships with them.
Also as the supply chain gets more complex, maintaining superior quality can get tough or downright stumble out of hand. Your focus and vision can get staggered, and hence you can lose your edge in your main products.
A new product can also cannibalize on your already established product lines which can result in loss of old customers. Innovation eats up a lot of funds. The risk factor is high; if you fail, resources and time go to waste.
Not to forget, stepping into broadly differing innovative categories is what landed Quirky in turbulent grounds back in 2015.
2. Widening current product lines
For instance, if you run a handbag business consider adding backpacks or other fashion accessories in the niche like bag charms and scarves to the collection. It is improbable for this technique to backfire as these categories add on to the current category you operate in.
By diversifying your current product line, you take up a larger chunk of the market you presently operate in.
By selling fries and soft drinks along with their burgers, the fast-food chain McDonald's makes eight times more profit than it would by offering just burgers.
So, by adding bag charms to your handbag brand, you can raise your gains. That is because your current customers for bags are most probably already looking for such accessories. By getting those from you, they wouldn’t have to turn to another brand.
3. Reliance on wholesale businesses or partnership with another brand or manufacturer.
What makes this approach so worthwhile is that you don’t have to invest time or effort. Rather you can begin reselling almost immediately. You can source products belonging to different relevant categories from your current suppliers. This will not only save you the hassle of finding new distributors but will also simplify your supply chain and boost your relationship with the current supplier.
Several benefits tag along with this approach. Such as:
• You save on shipping charges. Rather than shipping ten half-empty cartons from ten different suppliers, you can get the same quantity of products shipped by one supplier in five fully loaded cartons.
• You improve your relationship with the supplier which can lead to better rates and discounts.
• Less work, more sales; you get to offer new products while increasing your tasks by a minimum. Your payments do not go to different bank accounts, and you also save the headache of quality control by sourcing from your already trusted supplier.
LS Bags realizes the importance of keeping up with the trends in the fashion world. As times get modern, all of us need to grow bigger and try new things in order to cope up in the business world. Hence, we are expanding into several different but relevant fashion categories, so that we can help you grow your business while keeping the tough work to us. Check out our recently updated categories of Wholesale scarves, bag charms, and fascinators - try out some products for your business and let us know how it affects your sales.