Is your product range too wide?
When you open your business and look around or when you do a stock-take do you think to yourself "Is my range too big?" or "Do I need all this stuff?".
Quite often businesses carry too much product or go too wide trying to chase down every last sale. This often leads to excess inventory, slow moving products and cash-flow issues. It is tempting every time a customer asks for a product you don't have to get it but you need to be honest and ask yourself how many times have you actually been asked for that? If it's daily then maybe there is something to it but if it's weekly, monthly or even less than let it go and focus on the juicy stuff!
There are several things you need to consider when choosing (or reducing/expanding) your product range:
- When did I last do a stock-take?
- What are my slow movers (aged inventory)?
- Can I consolidate my products/suppliers?
- Do I have good stock of my best selling products?
- Are my best selling products profitable?
- Are my most profitable products displayed in the best spots (online or bricks & mortar)?
- Is there a consistent demand for this product in my business?
- Could I remove some products/brands without impacting my sales?
- Have you spoken to your customers/staff recently to get their feedback?
There are lots of things to consider but often most businesses can reduce their product range or the number of suppliers they deal with. Doing this will generally yield various wins:
- Simplify orders (less orders)
- Improve your staff product knowledge (less to learn)
- Improve margin (less aged inventory to clear & better terms as you deal with less suppliers)
- Make it easier for your customers with a clean, well-targeted product range (less clutter - too many options sometimes makes a decision even harder)
- Reduce your inventory levels (improved cash-flow)
I find this can often be one of the easiest and quickest ways to improve business profitability as it doesn't generally require big culture shake-ups to implement.....