Why (and How!) You Should Diversify Your Product Range
As we write this post, we’ve recently waved farewell to a year that inspired the biggest shift in retail ever witnessed. The global pandemic meant that there have been more customers heading online for both essential and recreational purchases than ever. With that in mind, we hope that your sales have been through the roof, and that you and your team have been able to celebrate appropriately – and safely.
As we embrace the new year, it's likely that you’re deciding how to make the most of 2021. There are always opportunities to make more sales, and to grow your business further. When you’re planning your strategy for success in 2021, thinking about extending and diversifying your product range – and minimising risk – is a great place to start. That's where we at Avasam step in!
Reasons to diversify your product range
Even if your sales reports show that you’ve just enjoyed the best year in the history of your company, we doubt that you’re thinking about taking your foot off the gas! Rather, allow that success to spur you on to even greater heights. One of the easiest steps you can take towards greater success is expanding the range of products that you sell. Not only do you set yourself up for potential additional sales through doing so, but you’ll enjoy plenty of other benefits too.
Bigger basket size
The aim of your business is to be making as many sales as possible in order to enhance your profits. That means more sales from more customers – but also selling more to each customer.
Your customers are always looking for more from the brands that they choose to shop with, and so when a customer has found one of your products suitable for their needs, maximising the value of their basket is essential. You’ll need to cross-promote complementary items to help encourage customers to spend more with you, and if you have more items in your inventory, that's much easier to do – since you’ll be more likely to have products that customers want and need. You’ll also have more opportunities to create special offers and so on, which will help to increase sales further.
Increasing customer satisfaction
No matter where we’re shopping, we all want the best price and good service. Wherever you sell online, if customers can get everything they need from you, and minimise the number of boxes and deliveries they receive, most will do so.
As long as your business continues to provide the excellent kind of service you'd want for yourself, customer satisfaction will lead to great reviews, increased word of mouth and social media shares – all of which will help to build your business and its reputation further.
Better rates from suppliers
As you already know, if you can buy inventory in bulk, you get better rates when you’re dealing with suppliers and wholesalers. That means you make better profits, or can create special offers for your customers, which can result in you becoming the preferred seller for that item – which increases sales further.
By working with suppliers that you already have a solid relationship with to source different products, you’re likely to increase goodwill. The more of those products you source and sell, the better the deals are likely to get.
Better advertising opportunities
In high street stores, customers prefer full shelves – they look great, and it means consumers feel that they can trust that there will be stock ready and waiting when they need to go back and shop again.
Although not in quite the same way, that rule also applies to eCommerce retailers – the bigger the range that you can offer your customers, the stronger your store looks. Having plenty of stock for each product is essential too, since customers have to be able to trust that they will receive their orders.
It isn’t just your OnBuy marketplace listings which you need to be able to demonstrate significant amounts of inventory for, either. Having more items in your inventory means that you have more potential for your social media campaigns, and if you have a blog that you use for content marketing, you’ll have more scope to discuss products and categories there too.
The challenges of diversifying your product range
Although increasing and diversifying your inventory is a great way to increase your potential profits, it can be a tricky thing to actually make happen. Some of the reasons we hear regularly against doing so include:
- It's too risky to tie up cash in unproven products, or to be left with dead stock that has to be cleared at a loss
- The warehouse isn’t big enough for more stock and there aren’t funds to take on additional storage
- Employees are already working as much as possible, and our budget doesn’t allow for more staff
- Minimum quantity requirements from wholesalers are too high, and we can’t commit to those levels
- Working with multiple suppliers can be problematic in terms of technical setup
If any of these ring true for you, then it might have been logical to delay expanding your business until you have funds available to grow comfortably. But without those extra sales, it can be hard to generate the profits that you need to help your business expand further – which means it can be a chicken-and-egg situation!
How to diversify your inventory with little investment
When you’re trying to grow your business, and you’re stuck for funds, it's tempting to keep doing what you’re doing until gradually you reach your goal. But changing your strategy can result in much bigger returns, and will help you to achieve the expansion that you’re looking for much more quickly.
Many retailers have overlooked dropshipping due to the number of internet scams out there that were classically connected to the business model, and the implications for the reputation of their company if they try to use it. But the reality of dropshipping is that it has been used successfully by traditional retailers to extend their offering for decades, well before eCommerce entered our lives.
The beauty of the dropshipping business model is that there isn’t any need to invest up front – so you don’t need cash available to buy from your suppliers, space in your warehouse to store your inventory, or additional staff to process your orders.
To use dropshipping successfully today, sellers can combine the experience of retailers of old with the automation of the 2020s. By that, we mean:
- Working with reliable, verified suppliers
- Using technology and automation to minimise errors and increase the number of items you can sell
- Using dropshipping to strategically extend your inventory – so you don’t need to store bulkier items or invest in more expensive products. You can also ensure constant access to trending products without needing to tie up cash
In some cases – as long as you carefully manage customer expectations – working with dropshipping suppliers from China can work. But where products take weeks to be delivered, and you’re unsure of the quality of the goods, dropshipping from overseas suppliers can result in a customer service headache. Finding suppliers in the UK that will allow you to work this way is much easier – especially if you want to work with multiple suppliers at once.
Working with a dropshipping platform means you can find those suppliers, without the hassle of setting up connections to each supplier feed separately. The Avasam dropshipping platform also connects your business to sales channels and shipping providers, allowing you to sell in more places with fewer barriers to entry.
Diversifying risk by selling on multiple sales channels
Without the right systems in place, selling on multiple sales channels can be challenging to keep track of, as you’ll no doubt already know. Going all in with just one sales channel presents a huge risk to your business, and means cutting out customers who choose not to shop with whichever channel you have chosen.
Diversifying your inventory is important, but diversifying your sales channels is equally essential to maximise the number of customers you can sell to, and to reducing the impact of any problems on a single sales channel at the same time.
Selling on marketplaces
For many budding retailers, there is an assumption that the biggest marketplaces are where the most customers are, and where most sales can be made. But seasoned sellers know that being successful on other marketplaces isn’t without significant challenges, and that you should create your strategy with those challenges in mind.
Aside from being slow to release your cash when you make a sale, one of the major problems with bigger marketplaces is that sellers are completely at the mercy of the algorithms and automation that they use to flag issues with seller accounts. Although you can appeal to the marketplace if your account is wrongly suspended, it tends to be incredibly difficult to get your account reinstated.
That’s why there are so many discussions on seller groups about this subject, and why so many lawyers are offering their services to sellers. This risk is why we suggest selling on several sales channels, as well as on OnBuy, where the success of the seller is central to the marketplace's business model.
This all means that, should the worst happen with one route to market, your multichannel approach means you’ll be able to maintain your sales elsewhere.
Whatever strategy you have in place, you’ll be looking for marketplaces that:
- Operate ethically
- Don’t compete with you as a seller
- Make it easy to achieve your goals
- Have simple-to-use tools to help you grow and improve your business
If this list sounds a lot like OnBuy – well, you’ll probably see where we’re going with this point! Avasam sellers that have joined the OnBuy marketplace during 2020 have seen significant increases in their profits – so we strongly recommend that retailers join OnBuy sooner rather than later.
Selling on your own website
Selling on your own website might sound like the perfect alternative to selling on marketplaces, but setting up your website, keeping it secure, and building customer trust are all time-consuming tasks. That’s before we even think about how you’re going to get customers to actually visit your website in the first place, especially if you’re a sole trader and you’re learning SEO from scratch.
So while selling on your own website can be part of a multichannel strategy, as a single sales channel it is unlikely to be perfect, or easy to turn into a success. Competition in eCommerce today is immense, and it takes a lot to be able to stand out from the crowd.
Selling in person
Many traditional retail outlets, as well as markets and fêtes, understandably struggled in 2020 due to COVID-19 and the requirements of social distancing. As the world gets back to normal, selling in person doesn't need to be left out of your strategy - it just needs to be done carefully.
Starting out with a stall at a spring or summer fair, and planning for Christmas markets in 2021, will allow you to gauge how well your products might sell in person. From there, you might work with a local retailer to sell in a section of their store, or use shared retail spaces, which are emerging as big-name retailers withdraw from the high street. Then it's about deciding whether you want to scale to a full-sized store, or several as your success grows – or continue to concentrate the bulk of your business online instead.
Other considerations for 2021
As you’re planning your business activities for 2021, it doesn’t stop with increasing your inventory and your sales channels. Looking at every aspect of your business and how you can increase the value of your investment from each (whether your investment is time, money, or both) is essential to ensure this year will lead to a bigger return than ever.
As we already mentioned, your customer service needs to be as efficient as possible. Customers don’t want to wait for responses to their enquiries – research shows that customers want replies to their enquiries immediately. And on top of that, customers also know that if they don’t get great service, they can complain online, or discuss your business negatively across social media – which has the potential to damage trust in your company, and in the longer term, to drive other potential customers away.
Getting your customer service absolutely spot-on can be a challenge, especially if you and your team are already stretched. There are a few things you can do to make customer service much easier in 2021 though:
- Make use of customer service automation software
- Outsource to virtual assistants
- Use bots on your website to handle basic enquiries
- Review your website and listings to minimise enquiries with pre-emptive information
- Add a great FAQ page with answers to the questions you get asked most often
Actioning these points won’t completely eliminate enquiries, and they certainly won’t stop customers from changing their minds about their orders or requesting exchanges or refunds – but they will help to reduce the number of enquiries that you have to answer day-to-day.
If you haven’t checked the rates of your shipping recently, then right now is a good time to do so, and schedule reminders to do so throughout the year. Increases in shipping costs – no matter how small – start to chip away at the profits that you have worked hard to build. Don’t assume that your usual courier service is still the cheapest. Just like your utility bills, you need to review them periodically to be sure you’re getting the best deal.
We probably don’t need to tell you how important your marketing efforts are. If you’re planning your social media posts, blog posts and other marketing assets on a weekly basis, you’re more likely to miss out on potential opportunities.
Planning ahead – whether it is three months, six months or even the whole year – on your calendar means you’ll never be stuck for something to post about. You’ll know when there’s a lack of events to create posts for, and during those quiet times you can schedule posts about your products to keep consumer interest high.
Starting the year off strong in order to increase your profits means planning ahead. Dropshipping from UK suppliers with Avasam means that you can diversify your inventory with no upfront investment, and you’ll be able to pivot to selling the latest trending items without risking dead stock. You won’t even need significant manual effort on your part – you just need to be able to choose the inventory that suits your customers, and be able to sell, which you’re doing already.
Once you’ve got your inventory sorted, it is a case of reviewing your sales channels – ensuring you’ve set up your seller account with OnBuy, of course – and then taking care of your customer service, your shipping costs, and your marketing. Investing some time here in getting everything perfect will mean you're in a fantastic position to enjoy both OnBuy's growth, as well as the growth of the eCommerce industry overall.
To discuss how diversifying your inventory will benefit you, or to find out more about how Avasam will work with your existing setup, visit the Avasam website, or set up a call with the team to discuss the requirements of your business. Alternatively, sign up for our eBook now for more info on dropshipping.