Expanding Your Product Catalog for Black Friday and Cyber Monday
Consumers are expected to spend $800 billion this holiday season, and retailers everywhere seek opportunities to benefit from this splurging.
Expanding product lines is a critical part of their holiday sales strategy for retail giants like Walmart, Lowes, and Best Buy. They continually add products to drive increased sales and up their average order value. For a small-to-medium-sized retailer, product expansion is riskier. Expanding your product catalog increases your chances of growing your customer base, but there’s no guarantee that new products will sell.
To add to the complexity of product expansion, more products typically lead to more warehouse space, which further increases costs. You can offset this cost for seasonal items or those that sell quickly. However, storage and inventory costs rapidly add up for items sitting on the shelf.
This is precisely why expanding your catalog through dropshipping should be a part of your holiday retail strategy.
For SMBs competing with bigger retailers this holiday season and can’t afford to increase overhead costs, adding a dropshipping component to your arsenal may not be a bad option.
The Benefits of Expanding Your Product Catalog
There are many advantages to expanding your product catalog when selling online, the first of which is the more products you offer, the more chances that a potential customer will land on one of your listings.
However, expanding your catalog is about more than offering additional options. From a business standpoint, you can use strategies such as up-selling and cross-selling to sell more. Through these strategies, you can increase your average order value, revenue, and units per translation. You can do this while providing a top-notch customer experience because you lead customers to complete solutions to their needs.
Increase Average Order Value Through Up-Selling
Offering a customer a comparable item at a higher price point is the best way to craft an upsell offer. It’s like an upgrade—rather than buying a $5 product, they can spend $15 and get additional value.
Depending on your industry and merchandising strategy, upsell offers like this are relatively flexible. You can use them on key shopping pages such as a product detail page or in your shopping cart. However, you must ensure to create offers that are a simple one-to-one product swap for a comparable item, rather than leading someone through a second buying process when they are already ready to purchase.
You can also upsell by creating bundles made up of primary products combined with products that compliment it. Bundles perform well further down the conversion funnel—you can also add offers for them in your shopping cart. The magic of a bundle is that you’re offering a product the customer has already added to their cart in addition to products that solve a problem or add value to the item.
To see what works best for your customers, test out bundles throughout your conversion funnel.
Sell More Through Cross-Selling
Another promotion to consider is cross-selling, which is similar to product bundling. Think of cross-selling as offering complementary items alongside a primary product but as individual items instead of a bundle.
An example of cross-selling may be offering a water bottle as a cross-sell or complementary item to a bicycle. Where you show your cross-sell item will depend on the complexity of the complimentary items. You may want to show simple complementary items further down the conversion funnel.
Quickly Test New Products
Another benefit of expanding your product catalog through dropshipping is the ability to test out new products quickly. It’s easy enough to add a new product within days. If the product sells well, you may choose to stock the products in your internal warehouse with your other catalog items.
Product testing and inventory expansion can be challenging for smaller ecommerce businesses. However, with dropshipping, you don’t need to allocate valuable warehouse space to purchasing new products you’re not sure about. Instead, you can offer new product offerings to your audience with minimal monetary risk. You can easily incorporate a new product into your merchandising strategy later if it turns out to be a hit.
More Cost-Efficient Order Fulfillment
In traditional retail, order fulfillment is typically mayhem during the holiday season. More orders = more products that must be packaged, shipped, and delivered to customers, requiring significant human resources.
If your team isn’t prepared for success through the holidays, you could experience a high employee churn rate and provide a poor customer experience.
Choose to add dropshipping to your strategy, however, and this doesn’t happen. Use dropshipping from multiple suppliers to bridge the operational gap if you don’t have the resources to hire additional help during the busy holiday season.
Easily Sell Seasonal Products
While it depends on your industry, season items play an essential role in holiday sales strategies.
Although seasonal items typically sell in lower quantities, they’re popular and suspected by customers, so you don’t want to get caught without them. And it’s never easy to estimate how much of a particular product you’ll need to stock each year.
Keep your seasonal customers happy by dropshipping your seasonal stock each year. Optimize your warehouse for other items instead of storing seasonal items year-round and struggling with the headache of how many season items to keep on hand each year. Sourcing them from suppliers ensures that you’re off the hook for anything you don’t sell.
Adding Suppliers Due to Inventory Challenges
Unfortunately, demand peaks are inevitable most holiday seasons—even more so in the age of COVID-19. 32% of consumers are concerned that global supply chain issues could cause a lack of inventory and their ability to purchase the items they want this holiday season. Because of this uncertainty, securing a more proactive, stronger approach to product fulfillment is a critical aspect of optimizing your supply chain.
So that you’re better prepared for Black Friday, Cyber Monday, and the rest of the year, consider sourcing from multiple suppliers. There are several advantages, including:
- Less reliance on any one vendor, which provides a safety net if one runs into difficulties in the middle of peak season
- More suppliers allow you to meet peak demand, which means fewer bottlenecks during fulfillment
- Introducing competition which provides suppliers an inventive to improve service and cost
- The competition also gives you more bargaining power
Streamline an Expanded Product Catalog and Your Fulfillment Processes With Flxpoint
Dropshipping is an excellent way for online retailers of all sizes to expand their product catalog and grow their customer base, especially during the holiday shopping season. Test new products, A/B test to determine which sell best alongside your existing merchandise. From there, you can choose products to add to your catalog permanently and pull inventory in-house or choose dropshipping support only during the holiday season to give yourself a competitive edge.
Lack of centralized data can quickly turn a successful holiday sales season into an average—or bad one—overall. Without data, you’re blind to potential opportunities to strengthen your inventory management, optimize fulfillment, and better support your customers. Accessing accurate, real-time data, however, leads to more sales opportunities across platforms. Leveraging automated inventory management further enhances this, allowing you to make more intelligent purchasing and fulfillment decisions at the lowest cost-to-serve.
Want to learn more about what Flxpoint can help you achieve this holiday season? Talk with an expert today.
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