Turning a Product into a Business: Why Having Multiple SKUS Matters
A product and a business are two different things, but a product can be the foundation upon which you build a business. Let’s start by defining a product versus a business as simply as possible, and then we’ll break down how all of this applies to an Amazon business.
An outstanding product does a useful thing in a differentiated and effective way. A product can be a service, object or system.
When that outstanding product or line of products (or services) finds a feasible market, then it becomes a business.
Both products and businesses are made available for consumer use to meet a demand or satisfy the customer. Not every product can or should become a business, but as an Amazon seller, you’ll find far more success when turn your product into a business.
To understand what this looks like, let’s use a successful business that started out as just one product as an example: Canon, Inc. It is the world’s largest camera manufacturer with a history spanning over 80 years. The brand is synonymous with world-class technology that is widely loved by professionals, but it started out as just a camera.
In 1956, Canon released the VT model Canon camera, the company’s first model that was designed for mass production. This camera was a great product that met the needs of consumers as a one-time purchase. The very next year, Canon did something that would be defined as their first step towards creating a business out of their product: they released a second product, an 8mm movie camera.
Now film professionals could invest in a Canon product twice. Not only did another product generate both second and first-time buyers, but it gave Canon more credibility. Releasing a second product was the very beginning of Canon starting to position themselves as an expert in the film industry. Decades later, Canon has built a brand that offers solutions for every level of photographer and film maker. If Canon had stopped at just one camera, it would’ve never became a leader in photography equipment.
If there’s one thing to be learned from this example, it’s that one product can create an avenue to a successful business.
We already know that brands that launch on Amazon typically have a higher success rate, and launching one product is a great way to start. However, a plan to add additional products to your brand should be in the back of your mind for the future. Here’s why:
1. Go from product to business
Building a product line will take you from a product to a business. In the example above, I demonstrated how Canon created a product line off of just one camera. This kickstarted their business, that continued to add products to meet consumer needs over the years. This is the number one reason why you should be adding more SKUS to your Amazon offerings.
2. More products = more brand recognition
This one is simple. The more real estate that your brand takes up, the more people who will see and recognize your brand. Building brand recognition can be incredibly difficult, especially in highly saturated categories.
Taking up real estate is especially important in terms of Amazon keywords, search terms and categories.
3. Create consumer trust
Consumers trust brands that have positioned themselves as experts in their respective category. There are multiple ways that brands can appear as the authority, but one of the most effective is by solving multiple of the consumers problems. Multiple problems can be solved by multiple products.
Let’s pretend that there’s a nail polish brand, and they have one product: nail polish. You cannot complete a manicure with just nail polish. The customer will have to go to a different brand to find a top coat, nail file, cuticle oil, nail polish remover, etc.
Alternatively, there is another brand that sells all these products.
Which do you think that the consumer is more likely to trust?
4. Repeat Customers
This one is particularly important if your product is a one-time investment (like a camera, for example). Having multiple products available increases your chance of attracting second-time buyers who already know and trust your brand.
5. It safeguards your brand
It’s never a good idea to put all your eggs in one basket. Consumer trends can be fickle, and in recent years, it isn’t just consumer demands dictating which brands make it and which brands fail. Worker shortages, supply chain issues and inflation have created a volatile environment for sellers. Having more than one product will increase your brand’s chances of survival if one SKU gets hit with the unexpected.
6. Aggregators will be more interested in buying your business
Demand for Amazon FBA businesses is at an all-time high. If your goal is to be acquired by an aggregator, you’ll have a much better chance of doing so with an entire line of products.
To learn more about growing your brand online, contact us!
Caitlin Banas
Caitlin serves as the main point of contact for clients and project manages their custom growth strategies. Caitlin‘s experience working in a variety of marketing roles across multiple channels has allowed her to gain a big-picture perspective when working with clients to propel their brand forward.
