Whether a business is successful and wants to expand, or a business is struggling and looking for a way to improve sales, the question ultimately becomes whether to add a new product. How do you know if that’s the right decision for your business?
Before you can answer this question, you need to walk in the shoes of your customers. How well do you know your customers? Do you know why they buy the products you sell? Do you know what the right price point is? Do you sales goals set for the next year? Have you evaluated whether adding a new product is the right decision or whether there may be a better way to grow your business or more importantly your profits.
Once you have identified who your customer is and what they are looking for from your business it will be much easier to determine whether a new product could benefit your business. Is there a niche you could fill by adding a new product? Perhaps there is a product missing from your product line that your customers would be interesting in buying. Do you have a product that’s currently not doing well that you may want to replace with a new product?
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If this sounds like a lot of questions, it is. You need to analyze your current sales to determine what is selling, and what new product(s) would be most beneficial to your business. One of the most common mistakes business owners make is to think simply adding another product to their line will result in increased sales and profits.
Sometimes improving your bottom line has little to do with adding a new product and much more to do with reducing your cost of goods and your operating costs. Today’s marketplace is highly competitive. If you are bringing something unique or that fills a niche you may be rewarded with a significant increase in sales. For example, when the new iPhone came to market those retailers who had it for sale did well. However, if you are adding a product that is already readily available, you may not benefit in the manner you hoped. For example, the Blackberry Curve can be found in many different department stores, so by adding it to ones products there is a far less likelihood of any significant benefit.
The lesson here is not to guess but to know what has the best likelihood of doing well with a new product is. Instead, do your homework, do your research, and make sure to do the analysis so your business is moving in the right direction.
