If you’re someone who has a solid company, customer base, and a lot of orders that are repeating, that's great.
But as you start to grow, gaining a larger audience, you need to meet the demands of these customers.
At some point, while a lot of people may like one product, they may want something with some changes, such as less sugar, a desire for alternatives, and at this point, you may want to consider the product range expansion.
Usually, this involves more SKUs, which means that you need to be mindful and strategic to keep the proliferation in check.
But expanding the product range is really important, and here, we’ll go over why.
Product Range, Product Mix, and Product line
The right management of an SKU does involve making sure that you replenish, keep track of, and are able to rationalize the SKUs of a company, expanding the product range and line to create new lines and ranges.
A product range is basically a bunch of variants of a specific category of products, whereas the product mix is considered the entire stock and types of products that some company offers.
For example, product mix includes beauty products, hair care products, skincare, and body care products.
A product range for hair care products is basically anything involving that, or maybe specific variants of this.
A product line and product range are actually used in an interchangeable manner, but that’s actually not correct.
Product line is used for variants of products, whereas a product range is a much broader type of product gamut, and may include products that are complementary.
Hair care product ranges may involve the shampoos that address different concerns. A product line is for variants of one product, such as for specific hair types.
Why Expanding the Product Ranges Mattes
It’s actually really good for those that are growing. It can expand the average order value, as customers buy more and more products at once.
This offers more chances for bundles and kits. When you increase this, you can also recommend products that are complementary to customers in order to create bundles that save costs.
It also impacts the loyalty of products, as it lets you have more options, and they won’t want to go to competitors as much, and they’ll keep coming back to you, building the customer base, and increasing the lifetime value of the person.
There are a few product range cons that come with this.
The first thing, is the costs. It can be expensive to develop this, and you also need to focus on supplying and manufacturing costs, and any costs to market along with selling all of that to fulfill them.
When they’re not executed in the correct way, it can definitely make things costlier than they should be.
The second thing, is you have to realize not every product is going to be a winner. Sometimes, there are those that dind’t sell well, which impacts the investments, and it ca case larger inventory stock to stick around, and lower turnover of inventory, and it can impact the inventory to sales ratios, the days, sales inventory, and the like, and you may see lower revenue per unit, even though some some items are selling quite well.
Making sure that you rationalize the SKU is really important, as it helps to make sure that the items that don’t sell aren’t sticking around, and those that do are there for a bit too
