Today, we at IBMH would like to demonstrate how offering an excessively large selection of products is not always the key to success, and that if you apply the theory of Less is More in your hardware business, you will see very positive results very quickly.
We agree that, in the hardware industry, quantity and variety are very important. But sometimes, in your desire to cover every request from your customers, it is easy to fall into the trap of having an excessive catalogue of products.
This means that having a large stock with a wide variety is desirable, but the mistake is in having repeated products; in other words, similar products with similar characteristics.
“But… How? Logic dictates that the more product alternatives you offer, the more demand you can cover!” you may be thinking.
And it’s true, that is what logic dictates, but… we have to say, NO! Or, at least, that things aren’t quite that simple. This is where marketing, consumer behavior, the economy and experience with thousands of brands come into play.
First of all, we propose that you review the scope (variety in the quality of each product) and the depth (alternatives for each product) of your product catalogue today, and assess if they are actually profitable.
What do you think about organizing your product selection according to this theory? We encourage you to apply Less is More in your hardware business in order to increase profitability.
Why organize your product selection of hardware and accessories?
Because, after reading the study “When Choice is Demotivating: Can One Desire Too Much of a Good Thing?”(*), in which the effects of quantity and variety on purchase decisions are tested, you will realize that you should reduce your selection and organize your offerings!
Even though furniture hardware and construction accessories belong to the industrial family of products, and jelly belongs to the consumer goods family, the consumer’s behavior and mental process when making the purchase decision are similar.
In this study, they conclude that:
The more similar choices the consumer has, the more difficult their decision is. This can even reach the point of the “paradox of choice”, in which something seemingly beneficial, such as having many options, becomes a serious obstacle in the sale.
How was this study done?
The study divided people into two groups and performed an analysis of their behavior in different situations:
- – Group 1 was shown and allowed to try 6 types of jelly.
- – Group 2 was shown and allowed to try 24 types of jelly.
The results were astounding.
- – In Group 1, which was shown 6 types of jelly, 40% tried one or more jellies, and of that 40% who sampled, 30% made a purchase!
- – In Group 2, which was shown 24 types of jelly, 60% tried one or more jellies, but only 3% ended up buying any!
So,… don’t you think that if you used the theory of Less is More in your furniture hardware business, your overall results would improve?
How to organize your selection to apply Less is More in your hardware business
It is true that variety is a very positive aspect for the consumer, and it is necessary to offer different qualities and/or prices, but experience proves that we must establish a limit.
Marketing will help you to make this decision, and we recommend:
- 1.Check product line by product line, family by family, and see if there are redundancies. Eliminate products that, within a given family, don’t contribute any differentiated value.
- 2.See whether the purchase of the items that you are going to sell can be consolidated to fewer suppliers.
- 3.Take advantage of this change to improve the terms of your business agreements with suppliers. Remember that the fewer suppliers there are, the more volume each of them can have. Use this argument to negotiate with them.
Why should apply the rule Less is More?
Not using Less is More in your hardware business leads to:
- 1.Inventory problems
- 2.Slower updates
- 3.More people replenishing stock
- 4.More computer monitoring and system updates
- 5.Confusion for the consumer and creation of the “paradox of choice”
Eliminating redundant products and organizing your selection causes:
- 1.Faster purchase decision making by the customer.
- 2.Increased purchase volume from the customer.
- 3.Faster sales (so you can assist more customers) with higher levels of satisfaction (word of mouth recommendations between customers and potential customers).
- 4.Repurposing of storage space. The space from the eliminated products can be used to store products with higher rotation (80/20) and ensure your stock is at 100%.
- 5.Reduced labor costs because of restocking.
- 6.More attractive display of products in the show room.
- 7.Easier stock maintenance.
- 8.By increasing your purchase capacity, the terms of your business agreements with suppliers will improve.
- 9.Increased profits and better ROI (return on investment).
The Bottom Line
In conclusion, clearly, this decision to organize your inventory to apply Less is More in your hardware business will have an impact on the orders you place for furniture and construction hardware imported from China. And so, as you may already know, if you need to improve your purchase prices even further, reduce procedural incidents and have the best selection of furniture hardware suppliers, please contact us. It would be our pleasure to assist you.