How Expanding Your Product Range Can Benefit Your Business

Imagine you own and operate an artisanal organic peanut butter company. Your company has grown steadily for years and you have a solid customer base, many o repeat orders. As your business grows and reaches a bigger audience, it also has to keep up with the growing demand of new customers.

At a certain point, you may notice that while most of your customers love your peanut butter, many of them have expressed their need for something containing less sugar. Or you may find that while many of your customers love your product, they may express a desire for an almond or cashew butter. Situations like these call for a need to expand your product range.

Adding more products typically involves adding more SKUs to your inventory. As a result, you have to be strategic about it so as to keep SKU proliferation in check.

Learn more about how expanding your product range can be beneficial for your business and how you can address the main challenges.

What is a product range?

Product range refers to the different variations of a product category that a company offers to appeal to a diverse audience with varying needs and preferences. The different products in a product range are closely related and share some similar characteristics but are distinct from one another and are often complementary. For example, a company may offer a range of hair care products such as shampoos, conditioners, hair masks, and serums. 

Product range vs. product mix vs. product line

Effective SKU management involves being able to accurately keep track of, replenish, and rationalize SKUs even as a company expands its product range with new product lines or diversifies its product mix with new product ranges. To avoid confusion, let’s take a look at how product range differs from product mix and product line.

Product range vs. product mix

Product range is the different variations of a product category whereas product mix is the entire set of products that a company offers. A company’s product mix may include different ranges of products such as hair care, body care, skincare, and beauty. Whereas hair care constitutes one product range and body care constitutes another and so on.

Product range vs. product line

The terms product range and product line are often used interchangeably, which can cause confusion. Although the two terms are closely related, product line is used more specifically for the different variations of one specific product whereas a product range is broader and can include complementary products. 

For example, a company’s hair care product range may include a line of shampoos addressing different consumer pain points such as curly hair, colour treated hair, damaged hair, etc. 

Product range examples

Leading brands and companies have succeeded with assortment planning because they know exactly what products to sell and when. Here are a few product range examples to inspire you.

Nordstrom

Nordstrom’s handbag product range includes different styles of bags including satchels, bucket bags, camera bags, crossbody bags, tote bags, and shoulder bags.

JBL

JBL gives customers the option to choose from a range of headphones including wireless headphones, in-ear headphones, over-ear and on-ear headphones, and sports headphones. Meanwhile, they also have another range of home audio products consisting of home speakers, loudspeakers, and soundbars.

Hershey’s

The Hershey’s product range includes different chocolate products such as chocolate bars, chips, toppings, desserts, and syrups.

Pros and cons of increasing your product range

As you grow your business, you may be considering adding more product ranges to your current product mix. While this can generally be beneficial, you also have to be strategic about your decision as it comes with several challenges and will require reviewing your inventory strategy. Let’s take a look at the main pros and cons of increasing your product range.

Pro: Higher AOV (average order value)

Product bundles and kits are a great way to increase your average order value because customers are buying more products at a time. The more products you have, the more opportunity you have to create kits and bundles. When you increase your product range, you’ll have more scope to recommend complementary products to your customers or put these products together into cost-saving bundles.

Pro: Improve customer loyalty

When you increase your product range, you can cater to the unique needs and preferences of a diverse audience. Moreover, you’re giving your customers more options to choose from. If they can find all the products they need with you, they have fewer reasons to go to your competitors. This improves the chances that they’ll keep coming back to your site to make repeat purchases, helping you build a loyal customer base and increase your customer lifetime value.

Con: Cost of development

Developing a new product range can be expensive. You’d have to consider additional investments in manufacturing or supplying costs. Plus, you’ll be spending more to store and manage the additional inventory. Not to mention the additional cost to market and sell those products and eventually fulfil them. If not executed strategically, it could significantly bring up your cost per unit.

Con: Not all products will be top sellers

Increasing your product range can be risky in that you may end up adding products that don’t sell well, resulting in lost investments. While you may be able to cater to more customers and increase your average order value, you may see low inventory turnover for certain products. This could impact metrics like days sales inventory and inventory to sales ratio. 

As a result, you may also see lower average revenue per unit even though certain items are selling extremely well. Regular SKU rationalization is essential to ensure that slow-selling items are removed from your product range.

Con: More complex order fulfilment process

The more SKUs you have, the more complex your order fulfilment process is. Since you have to manage more SKUs in your inventory, it not only adds to your storage costs but also increases the chances of picking the wrong items. This also means there’s a higher chance of sending the wrong item to the customer. Accurate SKU tracking systems are essential to minimise these issues.

Fulfil a range of products with ShipBob

As you grow your business and expand your product range, you may face issues related to fulfilling large quantities of orders. In some cases, some items may need to meet specific regulations or be shipped in special packaging. Instead of having to worry about all the complexities and nuances of fulfilling a wide range of products, leave your entire fulfilment process to a fulfilment partner like ShipBob.

ShipBob allows you to automate your ecommerce fulfilment process using our powerful proprietary software and best-in-class fulfilment service. In addition to fulfilling a range of products on your behalf, you can leverage the ShipBob software to effectively manage and track your inventory. 

Our software gives you real-time inventory tracking at the SKU level so you can see how each SKU is performing. This allows you to perform SKU analysis to see how many units were sold and how this compares to a previous period. You can also view data such as the days of inventory left and the expected stockout data so you can adjust your inventory planning accordingly.

ShipBob also makes it easy to account for your storage costs in terms of average cost per unit. These types of insights allow you to make smart decisions about rationalizing SKUs and expanding your product range.

FAQs

Product range FAQs

Here are answers to the top questions about product ranges. 

What is a product range example?

A product range example is a company offering different hair care products such as shampoos, conditioners, masks, and serums.

What are the types of product range?

Some of the main types of product range are product revisions, new additions, repositions, and new-to-world.

What does a product range do for a company?

A product range allows companies to expand their product offering and thus, addresses the needs and preferences of different consumer segments. This enables them to grow their audience while boosting customer loyalty. Having more products to sell also improves the scope of increasing average order value through bundles and kits.

What is the difference between a product range and a product line?

Although the two terms are closely related, product line is used more specifically for the different variations of one specific product whereas a product range is broader and can include complementary products.