Rethink
A while ago a client of mine decided to enter the online retail market.
They are manufacturers of bespoke, large and
expensive products, sold mainly through architects and interior designer.
By nature, this market is project-based, which means that income is irregular and planning is difficult .
By starting to make and sell small decorative items online they hoped some of their sales will become more regular and predictable, and they will be able to flatten a bit their erratic income curve.
The items were designed and created, sales started to increase but then they realised that:
this is a much more competitive market in which they have no advantage over garden-shed manufacturers that sell on Etsy for half the price
the logistics involved in fulfilling orders requires a lot of resources
too many items arrived damaged, resulting in unhappy customers
the management attention dedicated to this business line hurt their core business
So they decided to call it a day and focus on what gets them the best results - their original bespoke products.
Conclusions:
Sometimes you have to try new things in order to learn
Not every idea that sounds good turns out to be one, so prepare an escape plan
Diversifying has its risks and costs
If you try something and it doesn't work, quit
A wrong decision is not a mistake, just a lesson learnt
What are you going to try next?
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