Bad Credit Business Tips: When Should you Pull an Under-performing Product?
Giving up on a product is not an easy thing to do. As the owner of your small business, you carry more than just a monetary investment in your product line; you also may have a greater or lesser degree of emotional investment in the idea, as well as the awareness that you put time, money and effort in to getting it out there. For these reasons, even if a product is performing well below par, small business owners may yet be loathe to turn their backs on it and allocate the resources that go into producing it into a better program. In order to determine if their product should be axed, updated or left alone, there are a few questions that business owners should ask themselves.
What are your customers saying about the product in question? Shaking off the influence of ego, business owners should listen with open ears to what their customers are saying about their product. If you were able to create profit for yourself by buying your own goods, then you could afford to discount what your customers think. Sadly, business doesn’t work like that and no matter how great you think your ideas are, in the end you are not the one who has the final say, it will be your customers. The value of market research for small businesses is immense, and in particular, knowing whether or not your demographic responds well to your products and why or why not that is the case can save you a lot of time and effort. Ask your customers what might be stopping them from buying your product, and depending on what they say, you may be able to fix it rather than give it up entirely.
Is the cost of the product unrealistic? Creating certain products may have a high barrier to entry unless you are ordering in bulk. In order to put out a product that is less popular, you may find yourself passing off relatively high production costs on to your customers. Be aware that, even if your customers respond strongly to the product on offer, if the cost of the item is unrealistically high, that will throttle the amount of sales you can expect to make. Be sure to collect information on the pricing that your customers think is reasonable so that you can structure your orders to accommodate that information.
Is your marketing not strong enough? If you are hearing positive feedback about your product, and the pricing is right, the reason you might not be making sales could be a lack of effective marketing. Having great products and strong word of mouth may not be enough to keep your business moving forward after a point. Think about utilizing both direct and digital channels to drive more customers to your business so that you can make up your production costs and create profit.
Photo Credit to Davidd on Flickr