The other day I was speaking with an entrepreneur who sold her wares on eBay and Amazon. Her business is going well, but she’d really like to get to $10K per month in sales without taking too much more of her time, as she is a believer in multiple income streams and wants to expand those other business models too. My suggestion was to introduce new products constantly, but on a strategically timed basis. Okay so, let’s talk about this.
Have you ever looked at a Product Life Cycle graph in a Business Text Book? Well, if so what you saw was the traditional teachings of ‘product life-cycle’ which they teach in MBA school, retail merchandising, and marketing classes. Still, we can take this concept and use it for online sales and new product scheduling, consider this concept.
Now then, picture the ‘mound curve’ and as it starts up at its steepest point, that’s a great time to introduce a new product and get it started because eventually the first product will be plateau’ing. If you do that properly the new product will start to go hyperbolic and dissect the first product’s life-cycle peaking. If you want to stay hyperbolic you need to continue to introduce products in this fashion, which is kind of what companies like Proctor and Gamble and GE try to do.
An especially interesting case study would be INTEL and Apple as they try to stay in the high-profit sweet zone, it does wonders for their stock price. If you have a great product that is really cooking but has a shorter life-cycle (examples: cell phones, chips, and perhaps social networking add-on or new features) then you can keep the price high and go for the ‘early adopters’ of tech or companies that buy your products so they can stay on the bleeding-edge in the case of an AMD or INTEL.
In looking at that concept, you can see that concept working for someone who sells many different products online. You perhaps can tell when you have a meteorite product which will move fast, but burn out, so you launch your new product when your sales are blowing it out, because soon they will burn out, and you don’t want your per month sales to tank, and leave you in a cash flow crunch. See that point from a strategic standpoint.
I think you can use some mathematical formulas to figure this out, and I imagine someday some Oracle or SAP software connected to a corporate digital nervous system (Bill Gates book; “The Road Ahead” reference) where an Artificial Intelligent system which tracks all outlets and sales, inventory in real time will be able to do this with 90% accuracy, and that will give executives information needed to plan and strategize for capital spending, innovation exploits and cash flow. But you can do it long-hand using the same math, since your small business is not so complicated; yet.
Best of all you can break your business into components and product categories and then you’ll have a great picture of what you are doing and plot a course of EXACATTACKILY where you want to go; where you will go! Think On It.