More product variety is not always the best way to go. Do you know when to drop something from your line?
Businesses are usually more interested in coming up with new and exciting products to offer clients than they are with getting rid of them, but if you are constantly introducing new items to sell, you may find that others are no longer carrying their weight. What should you do when a product isn’t selling as well as it used to? Is it time to pull it?
There’s no quick and easy answer to these questions, but there are some guidelines to help you decide when removing a product from your product line is the best way to go. If your product fits all of them, you should probably get rid of it.
There’s a Better Version Available
Once an upgraded model of something has come out, there is little reason to sell the old model for much longer. You will notice that this is a popular scenario for vehicles, which tend to get pulled fairly soon after the latest model year hits the dealerships, but it applies to anything that can be upgraded.
Technology is particularly susceptible to this reason for removing a product or product line. Items such as:
- Cell phones
- Television screens
All of these become obsolete very quickly once the newer version comes out and unless you want to sell off the older models for dirt cheap, you will probably want to move on to the newest versions.
It isn’t Selling Well
Inventory isn’t just to help you figure out what to order more of, it can also be very useful in noting which products don’t move much at all. If you place regular orders for everything else in your store, but have one product that just isn’t selling, it may be time to retire it. Keep in mind, however, that the lack of sales could be due to outside factors. A fur coat won’t sell well in the middle of summer, for example.
With the proper record keeping, you should be able to spot items that aren’t doing well fairly quickly. One month of low sales doesn’t mean it should be removed from the product line, but if you have a six month streak of bad sales, you may need to evaluate the situation.
It Doesn’t Fit Your Focus
Has your company’s purpose or style changed since certain products were introduced? It’s normal for businesses to grow and adapt to the changes in economy and demand, so it should come as no surprise that sometimes your business may simply outgrow a certain product. Do a yearly product check to help you stay on top of how well a product fits with your company’s purpose.
Every time you re-evaluate your company’s mission, you should also re-evaluate how your products support your focus and consider removing those that clash with it.
You’ve Expanded Too Much
Take a good look at your product line. Are you offering too much? In some cases, consumers may not need all of the options you are presenting them with and if you offer two or more products that are very similar to each other, it may be time to remove one of them.
This is frequently seen in the auto industry, as well, where two vehicles from the same auto company end up being so similar that there is no real reason to choose one over the other. In this case, one of the cars needs to change drastically or the company will need to drop it.
Storage Space is an Issue
Whether you have a brick and mortar store or an online one, all that product has to be kept somewhere. Once space becomes scarce, you’ll need to start looking at getting rid of something or expanding your storage space. Expanding may not be necessary if you have a product that meets the other guidelines given here.
Removing a product from your line is a very big decision and not one to be made lightly. If you have been keeping careful records, you should have a good idea as to whether or not the product in question is actually earning money or simply taking up space, which can help you decide whether or not it should stay. There are several factors, however, including similarity to other products and newer versions of the same item.
In order to keep your business running efficiently, it’s a good idea to schedule a product audit at least once a year. Take a look at the sales figures, recent technological updates and the overall focus of the product in comparison to your business focus. Do this with everything in your product line, eliminate the items that are no longer a good fit and keep your business streamlined. Clients may appreciate choices, but sometimes simplicity is the better option . . . only you can decide which is the best way to go for your business.