Is this the year you’ve decided to eliminate overwhelm in your business? Streamline your work to make it easier, faster and more profitable? Then it just may be time to break up with your product line.
Now, I’m not saying to scrap everything. But take this piece of advice from both personal and professional experience. Most makers I work with are overwhelmed because they offer too many products and/or too many scents. Customers love their body lotion, so they often end up offering it in every scent imaginable. Then a handful of customers or friends ask for those scents in other products, so eventually, though the product line started off small and manageable, it quickly spirals out of control. I’ve been there myself, with my own bath and body product line. Wanting to make others happy, I kept adding products and scents, and it took a toll on my time and me, and it wasn’t worth the little bit of sales that came in for those extra items.
So how do you break up with your product line? How do you decide which items to eliminate and which to keep? It can take years to perfect a formula, so the connection to a product can be strong and hard to break. Here are 5 tips to break up with your product line.
1. Eliminate non-profitable products. If an item isn’t profitable, it’s got to go. If you haven’t already, go through your entire product line and add up all the costs included in making that product:
*Ingredients (including the cost of shipping the ingredients to your workshop)
*Labor – from pulling ingredients, mixing, filling the containers and washing up. Even if you don’t currently pay yourself a set wage, this needs to be rolled into your pricing, so as you grow and hire help you can pay yourself and your team.
Then multiply those costs by at least 2 (ideally 2.5 – 3) and then by at least 2 again to come up with your retail cost. If you’re not charging enough (=losing money on a product), then it shouldn’t be in your product line (or the price should be increased dramatically!) But we’re talking about trimming the fat in your product line here; we’ll talk about pricing another day. If there’s a product that just isn’t making the money it should, then put it on the short list of being cut.
Perhaps it’s just one size of an item that could/should be cut. Do you really need to offer that lotion in 2 oz, 4 oz, 8 oz, 16 oz and 32 oz sizes? Highly unlikely.
2. Eliminate items that take too long (or are too hard or take too many ingredients) to make. Products that are labor intensive or require a lot of ingredients are often those that makers don’t make enough profit on, so items in this category may have already been identified in step 1 above. Time is money, so if you’re spending a lot of time making products that aren’t profitable, that’s twice as many reasons to let those items go.
3. Eliminate items that just aren’t selling. Track all of your sales, broken down by product/scent combination. At least once per quarter, review those sales counts and compare them to previous quarters and years. Identify which items have declined in sales (or have never really taken off). Add these to the list of potential items to cut. There’s no reason to waste time and money making something that doesn’t sell. If it’s a facial cream that you love but others haven’t jumped on board, make it in small batches for yourself. You can still benefit from the product, but that doesn’t mean you need to offer it for sale.
4. Eliminate the products you simply hate to make. So what if your great aunt Lucy buys 6 bars of a detailed, luxury soap every Christmas and you don’t want to discontinue it and hurt her feelings? Simply offer that soap as a special order item for her and remove it from your lineup the rest of the year. Is there a fragrance oil that gives you a pounding headache for days? It can be one to eliminate. Think about the products that you dread and/or procrastinate on making, and add them to the cut list.
5. Eliminate the items that don’t seem to fit with your overall product line. Do you primarily sell bubble bars, bubble bath and bath bombs, but also offer a tattoo balm? If there’s an item that seems to stick out like a sore thumb, it may be best to remove it from your lineup. A product line should be cohesive and each item should make sense as to why it is included.
Now you should have a list of a number of products or scents that could be eliminated. Put on your CEO hat and remove emotion from the picture as you review the list and decide how to pare down your product line. You don’t have to choose everything on the list to eliminate right now, but the more you can slash, the greater your relief from overwhelm can be. Remember, you can always bring items back in the future as limited editions or special offers (if priced correctly to bring in maximum profit) – this is about cleaning things up right now to make it easier on you.
Once you’ve decided which items to remove, email your list to let them know which products and/or scents are being discontinued. Oftentimes, customers will stock up on items that they know they won’t be able to buy in the future. If inventory doesn’t move as quickly as you’d like, you can run a sale, offer those products as add-ons to other purchases or include as surprise gifts to your best customers when they place an order.
You should already feel a bit lighter, just thinking about clearing out some of your inventory. If your product line still feels too big or too complicated, do this exercise again and scratch some more items. This doesn’t have to be a one-time event. Any time you’re starting to feel overwhelmed, burned out or dread making products, this is one way you can help reign in that frustration.
Question: Have you broken up with your product line? Share in the comments below the difference that it made in your life and business!