7 Questions to Ask Yourself Before Expanding Your Product Line
by Carrie Hinkel on November 28th, 2007
For most retail businesses, eventually it makes sense to expand your line of products. However, is your store or website really ready to handle all that extra merchandise? Ask yourself these simple questions before you decide to buy new products. Finding the answers to these questions might just save you from a few headaches!
1. Can you really afford to buy new products? This seems like the most obvious question but, believe it or not, it gets overlooked more times than not. Your business has been operating on a cash flow based on a certain inventory. If you are just getting by each month, then it may not be the best time to add new products. Take a good look at your cash flow and make sure that buying additional products won’t put your retail business under. And, don’t forget about the additional storage and handling fees from your warehouse or fulfillment center.
2. Can your warehouse handle the extra inventory? Before you decide to place your new order, you should be sure that your current warehouse or fulfillment center could really handle the extra inventory. It’s possible their space is too full to store additional products. It’s better to find this out before you order, rather then as the delivery truck is pulling up to the loading dock.
3. Is your retail space or online store ready to handle the extra products? Buying the products is the easy part. It’s making your store ready for new merchandise that takes some time and effort. So, instead of having products sit in your warehouse while you get your store or website geared up, get your store space or website ready for the new products ahead of time. If you have a website, it’s possible you may have to schedule work time with a web developer weeks or even months in advance.
4. Which products are best sellers for you now? When you make the decision to add new products to your store, it’s best to really think about what you want to spend your money on. Take a look at your sales history and see what types of products sell the fastest and have the biggest profit margins. Continuing to buy products in that particular category may prove to be a real profit boost!
5. Do the products you want to add make sense for your store? Do they complement what you currently offer, and will they boost your profits or just sit on your shelves, destined for the clearance bin?
6. Does your distributor carry other items? If you’re looking for new products, try starting with your current supplier. Chances are they carry a wealth of products from dozens of manufacturers. Buying more products from them just might make you qualify for some hefty quantity discounts!
7. Do you need to find another distributor? If you’ve decided you don’t want to carry your current suppliers other offerings, then you’ll have to look elsewhere for products. Any seasoned buyer knows that this can turn into a lengthy search. First finding the right products, then the supplier, then good prices.
Adding new products to your store or website is exciting, but don’t let your enthusiasm get in the way of making the right decision for your business. It just takes an honest look at your finances, your sales and the competition to know if your business is really ready for the next step.