Scaling is important to keep your business growing – fast enough to gain traction, but not so fast that your business implodes. The key is to scale effectively. Here are two tips to help you do just that:
#1: Current inventory is your first priority.
You have two types of inventory: current inventory and opportunity inventory.
If you have a good, simple product in your current inventory that’s making decent profit and not becoming a hassle with returns or negative reviews, keep going with it. Don’t spend your money and time finding a new product; put your profit back into your business to support your current inventory for as long as it continues to sell well. The longer it sells, the more money it will make you.
Opportunity inventory is any of the new products you might have your eye on. It’s fine to want to start selling new products, but your current inventory should always be your priority. If you put all your money into launching a new piece of opportunity inventory and neglect your current inventory, your BSR will drop, and suddenly you’ll have to work twice as hard to bring your current inventory back up to scratch. Now, you’ve lost time and money. You can never get that time back, and the money will take a while to replenish, too.
Never sacrifice current inventory for the sake of opportunity inventory. You have no idea if your opportunity inventory will sell well. Even if you’re 99.9% confident the new product will be successful, it still might not sell the way you hoped. Don’t put the current inventory that’s making you steady money at risk.
#2: It’s better to expand within a product category than to jump into a new one.
Say you have three products in the kitchen category, and they’re all selling well for you. You’re ready to launch a fourth product. The product you have your eye on is in the automotive category – but you’ll spend more time and money trying to break into the automotive category than you would launching another product in the kitchen category. Here’s why:
You already have people who buy your kitchen products. You have an email list of your customers. You have 10,000 people who love your kitchen products, and then, suddenly, you launch an automotive product. Your current customers will have little to no interest in that automotive product. They expect kitchen products from you.
Launching a product in a new category is like starting over with an entirely new company. You’ll have to find new buyers and new reviewers, and rework your ad campaigns to be effective in a new category. Any new category you enter will come with a learning curve, so it’s best to master one category first and only launch into a new one when you have capital to play with.
Smart and effective scaling is the key to growing your business over time. Nurture your current inventory and master a category. Put your time, energy, and money into the products and categories that are already successful. When you prioritize properly, you’ll see your investments grow.