B2C – How Offering TOO Many Products Negatively Impacts Your Business.


We live in a consumer-driven economy, if we want it, we can get it, and get it fast. Large retailers such as Walmart, Target, and internet giant Amazon have had success offering consumers thousands of products at their fingertips…all in the same place.

Additionally, we live in a “copy-cat” society, once somebody or something is successful; we strive to emulate this with visions of achieving a similar outcome. With that in mind, some businesses are offering their customers as many products as they can in an effort to satisfy ALL of their customer’s needs while attempting to maximize their revenue.

Though this business model has worked for the aforementioned retail and internet titans, the same cannot be said for all who attempt to mimic it. This model is not a suitable or logical for most to follow since most firms aren’t designed to offer their consumers such a large volume of products efficiently. In its most elementary state, most business models are created with the following assumed;

Progressive & Sustainable growth is a primary goal for any business.

  1. Generate revenue.
  2. Pay expenses.
  3. Earn a profit.

Maximizing profits, or owners return, is the goal for most businesses. In the generalist of terms, “turning a profit” implies the business is financially healthy, since there are funds remaining after financial commitments have been met.

Profit generation is the desirable outcome businesses strive for, but, I’ve noticed a misconception with owners’ believing that increasing revenue coincides with greater profits. Negative consequences typically follow once businesses assume this notion of, “more revenue equals more profits”, and disregard what is driving the revenue as an oversight.

The adage has proven itself time and again, “you have to spend money to make money,” thus to earn the revenue your expenses will most assuredly grow. The idea of being able to offer your customers everything to entice them to shop exclusively at your business creates an opportunity for decision makers to lose control of the expense portion of the equation. By trying to be everything to everybody, you’re subject to,

  1. Higher prices – Increasing your product offering typically means purchasing from new suppliers that you won’t have a history with or special dealer pricing.
  2. Lack of expertise – Offering an increased amount of new products can make it challenging for your staff to be knowledgeable on all product categories and products.
  3. Price wars – It’s not enough to simply have the products, you also have to offer the lowest price, and this often leads to “matching or beating any advertised price.”
  4. Increase in refunds and returns – Again, unfamiliarity with products that require service or attempting to offer the most affordable product(s) means forgoing quality.
  5. Increase in Overhead Expenses – You want to maximize the amount of time your shoppers have to shop; you may have to extend your hours and potentially increase locations.

There can also be expenses or inefficiencies that arise that are not mentioned above.

So, what are business leaders to do? Refrain from increasing their product offerings? Simply allow bigger stores to consume their market share? Maintain business “as is” and hope for the best? The answer to all of these questions is a resounding “NO.”

Our economy is evolving; consumers are evolving, as should your business. I‘m implying to evolve without forsaking what brought your business success to this point. If you’ve achieved success being an expert in a particular field or within a particular category of products, do not lose this simply in an effort to offer your customers a greater variety of products. There is a profitable place in this economy for the “experts” and the “specialists.”

As a business leader, it is your responsibility to assure that your business is progressing appropriately within its marketplace and understanding the optimal product market mix strategy is a primary function of your role. Rather than trying to be everything to everyone, focus on your target market and what product mix you can offer them that best promotes your brand/business and offers you a competitive advantage.

I’ve worked both for and with businesses that have attempted to grow for the sake of growing, and it produced lackluster results. I’ve also been associated with businesses that had a firm understanding of who they were and what they needed to ensure maintaining their success, and they often did.

Most businesses are striving to achieve the same result, maximize profits, although we’re all playing the same game; we all have different pieces to utilize. The strategy we employ and how we use our “game pieces” dictates who advances and who regresses. A critical part of the game and strategy is identifying your strengths and maximizing them to their fullest capabilities, the appropriate product market mix strategy will offer the firm a definitive advantage and increase the likelihood of sustainable success.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: