DB #02: Discover my full catalog, PLEASE?!
Should your catalog be this big?
The Problem:
This is by far one of the most underrated problems an e-commerce business has. After putting lots of money into ads, and pushing best-bought and wish-bought products, every extra product discovery is a blessing. Too many e-com owners still assume that people will discover the total catalog and everything is going to get sold (eventually).
I’m a big believer in less is more. Simplicity matters. And if it comes to e-commerce, simplicity also means simple and clean stock handling. Sure, you can test new products but in the end, you want to focus on what sells and not overcompensate your stock with low-margin cross-selling products or impulse products.
The Solution: Best of Class
You need to keep an eye on your units. This matters a lot.
Ask yourself these questions at the end of every year:
What product sells well this year?
What product doesn’t sell this year?
What still sells after last year and keeps selling more?
What still sells after last year but doens’t sell that well anymore?
What still sells since its launch and keeps selling more?
What still sells since its launch but doens’t sell that well anymore?
How do you do this
Export sales per unit per year since the start of its availability.
Sum all sales per year by year of introduction of the SKU
Eventually, you should get something like this:
Do this at the end of each year so that seasonality has been a part of this exercise as well. This way you can keep track of the growth or ‘productivity’ of your catalog.
You could also add the following to the export to have more insights:
Add an extra column for the category name (optional - recommended)
Add an extra column for the number of sales (optional - recommended)
Add an extra column for the margin of sales (optional - recommended)
Ideally, you want to do this at a category level so your stock, your inventory orders, and above all your profit can be measured and adjusted where needed.
Clean catalog = fewer expenses in the end
Don’t grow your product list if it doesn’t sell. Keep an eye on that. It’s a first-principle approach to discovery as well. Fewer products to discover, less ad budget to spend, less warehousing, less picking, better and simpler information architecture, and more focus on the added value.
The same counts for a brick-and-mortar store, yet, dressing up the window is much easier and has lots of common sense to show off the best-selling and best-margin products. It comes naturally. A digital showroom is harder to maintain as the window and attention are small and very limited in size ;-)