Understanding Product Life Cycles: How To Always Pick The Right Products
When you sell online, you might be tempted to think that, once youve found a product and a supplier, the only thing left to do is sell. But without ongoing market research and product sourcing, youll soon see your profits begin to decline. No matter how in-demand a product may be, it still has a limited life span. What sells at a premium today, you may not be able to give away tomorrow. Thats why you need to constantly keep an eye on where your products are in their life cycles so you know when you need to begin phasing out old products and phasing in new ones.
Monitor Product Performance
In the early phase of a products life cycle, demand is high, supply is low, and prices are at a premium. Youll find it difficult to get in at this phase; the competition phase is where most online sellers make their money. Competition hits and supply surges; demand stays the same. Prices start to lower a bit, but conversion remains pretty steady. Towards the end of this phase, demand begins to wane, and a product moves into the decline stage.
Demand can drop off for many reasons. A product may...