To be or not to be delisted – How can online sellers decide?

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In most cases, the end stage of a product is when it stops providing or doesn’t provide any profits.  Once a product starts showing losses sellers stop selling it and move on to new products that will bring them profits again.

Online seller Chirag Gada specialises in the sale of bags and luggage items. He has been in the business of online retail for 3 years now and sells under the premium luxury brand MBOSS. He is aware that some products under his brand are not as profitable as the rest.

“Just like most businesses it is typical to have a 80:20 composition for most online sellers, wherein 20% of their products give them 80% of the sales. It’s the bottom few products out of the remaining 80% products that we discontinue every quarter. This frees up resources such as space and capital and leaves us with few SKUs to focus on,” he explains.

For deeper insights on the best time to stop selling a product, IOS spoke with Shashank Shenoy, the bags and accessories category manager from multi-channel order and inventory management firm, Browntape. He informed us that determining when to continue and when to discontinue the sale of a product is a very complex process.

So here are a couple of notes to help simplify the process.

When should you discontinue product sales?

There are multiple factors to consider says Shashank and lists out the following basics to us. He claims that online products usually do not sell when the given product is:

  • Not a normal consumption commodity or niche like ashtrays, eco-friendly products
  • A price-sensitive commodities such as mops and small appliances
  • Not of a popular brand in categories like in case on luxury goods and large appliances

Shashank insists that sellers should consider taking down a listed product when:

  • It doesn’t sell for more than 180 days
  • It has been exposed to different aspects of advertising on a marketplace and doesn’t deliver
  • It is not absorbed by the target audience

Online Sellers say:

1. Stop selling when returns are high!

Another reason to discontinue product sales is when product returns are high. Returns are bad for your seller status on an online marketplace. The more returns you receive the lower your credibility is on an online marketplace.

Kids and baby care products seller Mayank Goyal believes returns are the main reason to consider discontinuing a product. He says, “Sellers should note the return percentage for any particular SKU or brand and should work on giving proper quality to the buyer.”

He further adds, “If sellers are not able to understand why returns are occurring, they must discontinue the product with heavy returns immediately as their seller accounts are at risk. Marketplaces can block or make accounts pending when the returns are too high. Buyers have the full liberty to return products and are willing to use it for genuine and non-genuine reasons.”

2. Stop selling when you receive negative reviews

MBOSS’s Chirag mentions, “Discontinue anything that is constantly getting negative reviews as the long-term negative impact on your brand is far higher than the short-term gains you get by selling that product.”

There’s also the issue with returns and cancelled orders you must deal with.

3. Discontinue product when losses are rampant

If you make losses on a particular product accepting more orders will not fix things. Sellers must check the performance of each SKU to understand where their losses are coming from.

Mayank states, “Selles must check the settlement and should discontinue loss making products.”

Online seller Chirag says, “Products with high returns are a burden on the P&L. Hence, we make them less active and don’t push their sales much.”

When shouldn’t you discontinue product sales?

Mayank also mentions that sellers need to understand why their products are not doing well. He says, “We haven’t discontinued any products till date. All our products are doing well in the online market. But we do have low demand goods. Dohars do not sell as well as the rest of our offerings. But we know why. It’s because there are some products that are difficult to describe in words and Dohars fall into that category.”

Before taking down your listed product you need to consider whether it deserves another chance. Sometimes you might not be doing enough for your product, this holds it back from selling.

According to Shashank from Browntape, sellers need to check up on their product’s:

1. Scope to grow

Don’t be hasty to get rid of a product when it doesn’t perform well. You need to understand where it is in its lifecycle. At the same time, you need to understand that some products do not touch the pulse of your audience. But ones that do, have the potential to make money but may be taking time to give sales.

For example, you may be selling gold and silver jewellery under your own brand. Most consumers may find it difficult to trust your brand because you are not a common name in the market. However, the online jewellery market is doing pretty well. Major players Bluestone and Caratlane received Rs. 200 crore and Rs. 357 crore respectively this year from investors. In about 3 years this market is expected to hit $3.6 billion. And sticking around to build your product brand on an online marketplace won’t take too long.

To understand your product’s potential you need to watch how your product’s market is doing. At the same time you need to make sure  you are selling on the right marketplace. If you sell niche commodities you must pick a suitable marketplace for your goods.

2. Visibility on the platform

Sometimes the lack of sales could be due to the simplest of reasons. When speaking with Shashank from Browntape, we uncovered that absence of simple fundamentals can affect product visibility. He mentions that negligence can cause poor product visibility on marketplaces:

  • Incorrect product listing, i.e. listings products in the wrong categories, leaving out key details
  • Not following marketplace guidelines for writing product titles
  • Omitting relevant keywords from product descriptions which exclude your products from customer searches

3. Unique selling points (USPs)

Another factor that affects product performance is not highlighting USPs effectively. In case your product has special features mention them in the descriptions and product highlights. Also, if your marketplace allows you to upload product videos use this facility to display unique features or unique ways in which your product can be used. If you do not have the videos option use these product photography pointers to capture your product’s USPs:

What about seasonal products? When should you start selling and when should you stop?

Seasonal products receive demand only when they are in season. But when is the best time to start selling so you don’t miss out?

When to sell seasonal products?

The best time to start preparing for seasonal sales is one season before your products are in demand. That is in case you plan on manufacturing them. If you only supply products then you must prepare your listings one month prior to the season, advises Shashank.

He says, “It takes time for sales progress to kick in. But if sellers start early they don’t miss out on the opportunity to meet initial demand.”

It is important to go through last year’s data to see which products are doing well in terms of colour, patterns and materials. This way you know what sells best and when to sell more of it.

When to stop selling seasonal products?

Seasonal product sales must end the moment the season winds up. You do not want to bear unnecessary warehouse costs for products that do not sell. Also, you do not want to end up hoarding merchandise till next year because it will lose its quality or end up going out of fashion when the season starts again.

Bags and accessories category manager, Shashank says, “The moment the season is about to get over sellers must kill prices. During the end of season consumers are sensitive to prices. Sellers must lower prices to sell off their stocks.”

Which are the best-selling products in ecommerce?

Each product category has its best sellers. There is no one category that can be termed as the best. In the bags category Shashank says backpacks are the top sellers. Then come laptop bags and the rest.

Browntape provided us with the following figures to understand demand in the bags category.

Figures obtained from Broowntape

Figures obtained from Browntape

If a particular category is in demand chances are everyone is looking to join that category. Take a look at Snapdeal’s listings for the bags category:

Snapdeal

In this case highlighting USP features is a must. They will set your products apart from the competition. At the same time make sure you are promoting the USPs consumers are actually looking for as you in the next section of this article.

How can you revive product sales?

1. Lowering product quality

If you sell a product for Rs. 1000 and your competitor may manage to make the same and sell it for Rs. 500. Your competition can maintain low prices for his product because it is made from low-grade materials. Now what you need to consider is can you make low-quality products too?

Let’s take an example; a customer who buys branded shoes may want a low-quality cover for these shoes.  In this case, you can afford to bring down quality as long as the basic features are met, states Shashank.

He gives another example where a consumer is looking for a laptop bag. In this case, the bag must be qualitative, water resistant, comprise of a laptop pocket, have an organiser and other compartments too. If one is travelling with their laptop, there are other things they will plan on taking with them. In this case, if the product quality is low returns will eventually kill it.

2. Offering combos

You can provide buy 1 get 1 free combos or sell your loss making product with another item in your listing that’s doing well. Getting 2 for the price of one or multiple items at a reduced price makes a consumer’s fingers twitch to hit the buy button.

3. Listing in multiple segments

To improve the sales of your product you can try increasing product visibility. One way of doing this is with advertisements and promotions. Another visibility enhancing technique is listing your products in multiple categories. If you sell sneakers, add your product to casual shoes, sports shoes, running shoes and other relevant categories.

4. Offering cross-category combos

These kinds of combo deals require combining your low sales product with products from other categories. The common feature between these two products could simply be colour or brand. This gives you the liberty of selecting your best products to pair with your weak ones. It is also a chance for you to replicate your listings in a unique manner.

It is important to understand whether your product is capable of progressing. Sometimes it’s not just advertising you need to push sales. It could be the basics that are messed up and in turn, your product fails. Now that you know when to stop selling a product and when to keep selling, you can avoid hefty warehouse charges for goods that do not sell, unnecessary returns and losses too.

Let us know through the comments section below how you decide whether a product needs be delisted or if you follow these same techniques.

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