Is it better to have a variety of goods for sale? Not always.
Why is it that most businesses sell more than just one product? Often they not only have a wide variety of goods, they also produce similar products to appeal different groups of customers. Is it better to give the consumer more choices or focus on a single product? – It depends. Let´s find out what suits your business best!
So – what kind of company?
1. Large Company
As a large company, with only a single product, the focus is on: further development, creative new applications or editions and effective marketing on your product. Take Crocs shoes for example. The shoes have the same basic structure but you can purchase them in different colour, size and with individual stickers. Crocs now has a variety of other shoes but for a long period of time the whole company focussed on only the bestseller until the development of new products was affordable and not risky for the business. This is mainly the key point for large companies: Selling only a single product might not earn constant money to provide for all the company’s expenses long term. When the company has enough income it is a good opportunity to invest in new product development to stay competitive and innovative.
2. Small Company
When you are a small company your chances are half-chance. Either the focus is on growth or the company is at a level where it earns enough and is able to pay all costs. So far, so good. A threat to your small business could be that somehow your only product is not purchased anymore, because there is suddenly no more demand. There are two basic solutions: The company can win back the market share through great marketing and advertisement, and continue with the same single product, or it is time to change the product itself or the product variety. (Of course there are many many more…)
Most start-ups start small and will try to expand after learning some valuable lessons. This is the reason why so many start-ups focus on building one product at a time. It can make sense to stay focused on only one product because you can serve an under-served market by filling in market niches. It is easier to target one specific group of consumers. You can really get to know your group of consumers and their needs. This can speed up the developing process and can make your single product better much faster. Also it is easier to analyse information because the feedback is only on one product. It can also make it easy to provide valuable customer service, which can lead to a successful business-consumer relationship.
-> When you want to use this opportunity to place a single product shop online visit vemono.
Where are you selling?
If you are selling your single product in a local store your customers can only come for one reason: your unique single product. In basically all cases this wouldn’t make sense at all because the customer doesn’t have a wide variety to choose from and has to make the way to your store only to see one product. Highly unlikely one can find a store based on one product. If you spot or know such a phenomenon I would be thankful for comments below for further investigation.
-> In case of a single product disposition it would make more sense to offer it in outside sourced stores together with related-purpose products.
When there is only one product – this is where the magic happens! With an online-shop for a single product everything is all about your unique “invention” and it gets all the attention it deserves. Online it is a lot easier to find buyers without having to offer related products. This eliminates the problem of actually visiting a real store and only finding a limited selection. Even for large companies with a wide variety of goods it would be a promising opportunity if they would have a one-product shop for the bestselling product.
->If this seems interesting consider having 3-4 web shops with each containing one of your products. It is a variety you can sell but each one is still an individual shop when it is for example ranked higher in google-search results because the focus is only on one product.
How are you selling?
You are offering a premium product and because your service costs are high and your product maybe is high-maintenance so the turnover on your product should be high. This is a good strategy when your product is not specifically a necessary gadget or service. If it is also only one product you are selling it is even more important to make it stand out and giving it unique, remarkable features.
->This is an example for wants and needs. If your consumer doesn’t really need your product he can easily live without it. Therefore it is always good to describe your premium product as a luxury good to boost the sales.
Quantity is especially important when your revenue is almost the same as your expense. So the turnover of one sale is not very high. For example the product you are selling is proportionally very expensive to produce. This makes it essential to sell large quantities in order to be in a competitive state. With only one product it might be easier to focus on the product itself but this scheme would definitely be more effective when used by a company with a larger variety of goods.
New, new, new! Your product has a new feature, application or innovation – and you are the only one offering it? Jackpot. This is a situation every company wants to be in. When this is the case you have all options, not depending on your product variety, to sell your product. If it is one product only that is remarkable; it is also a good opportunity to invest in a single product-display on the internet, in a store or a retail chain.
Are you the producer of the product?
Awesome! I am not here to patronize. May you do well!
When your company is only a reseller for the product(s), make sure to always provide good service and deliver customer feedback back to the manufacturer to improve the quality and therefore your own turnover. Simply your forwarding of the important improvement ideas can help optimize the product without causing you any extra costs and could even reduce your return-rate.
To whom is your product sold (service-orientated)?
1. Business to Consumer
People will always demand more quality customer service, so it should always be on your mind to satisfy your customer needs. It doesn’t matter how many products you sell but the expectations of customers don’t take under consideration, if you have a lot of goods you sell or if it is only one. Service can be much better when you don’t have “too much variety” and your customer support can’t level up to the expectations.
2. Business to Business
It is different when you are in a BtoB-relationship because someone else is taking care of your service and your disposition. So be smart when you choose your Reseller because they are representing what you fabricate. This is where you try to get valuable feedback of your Resellers and the circle is complete.
In the end it is not important how many products you sell. It depends on your situation, your service capabilities and the relationship with your customers and resellers. The size of your company is also irrelevant as long as you know how to sell your product, know how to advertise it, have the right pricing strategy and excellent service. So it is majorly up to the decision-makers and the product itself how successful one is.
Multi product businesses have the advantage of risk distribution, which means the weight of turnover does not lie on a single product and if it doesn’t work out with product #23 – the volume of sales of product #56 can maybe compensate the red figures. The number of goods a company is selling divides the time spent on each product. More products = less time for each individual product and also more costs. When the energy focuses on one product it is obvious that it is likely to have a good outcome because the whole company is pulling in the same direction. This is why it is a common model that a business is launched selling only one product and is then increasing the offered number of products by the factors money and time. Start small and think big.
Large companies should be aware that there is the opportunity to emphasise their bestselling product and giving it the possibility to “rise and shine” with an individual own web shop. This could rank the web shop higher in google-search, boost the sales and make it seem more wanted because it is so “important”. Consider it like a VIP within your variety of products. Let the product become the brand because the next step is that your products name can substitute the actual term for the whole product category.
Example: the term “iPhone” is sometimes used as a term for any “smartphone” – even though it might not even be an iPhone.
Usually this phenomenon is achieved by single-products or not a huge variety of goods.
A Formula to success? Let one product come to maturity, then invest in expansion and develop a product variety. Think of growth only when you have both feet on the ground financially and you are well established in the market.