There are several reasons why you may not be selling a certain product on your online store anymore. The reason is important, because this will dictate how you handle its product page on your website.
A product may be discontinued for the following reasons:. If a product is permanently discontinued, this means that it will never be sold on your online store ever again. A product that is only unavailable temporarily is one that will come back to your online store in the future.
However, many customers may still be using the out of date version — this makes the product page still valuable. Source: Vertical Leap. You want to avoid using phrasing like this in the actual text on your page, because Google may interpret this as a soft according to Google Webmaster John Mueller.
Soft errors occur when Google interprets a page as being unavailable, so avoid phrasing that suggests this — it may ruin your ranking. Source: Neil Patel. In this case, you may need to take the page down and have customers be directed to a However, if you must set up a , rather than redirect customers to a generic page, consider creating a custom page that acts as a landing page to direct those customers elsewhere.
Like a repurposed product page, a custom page can include recommended products and a prominent call to action button. These include:. According to Matt Cuts , a Google Webmaster, a small eCommerce store with less than pages should not use a page; a redirect is better here. Figure What type of qualitative issues should management consider if a quantitative analysis reveals that a segment should be dropped? Figure Party Supply is trying to decide whether or not to continue its costume segment.
Assume that neither the Direct fixed costs nor the Allocated common fixed costs may be eliminated, but will be allocated to the two remaining segments. Figure The Party Zone is trying to decide whether or not to continue its costume segment. Figure Trifecta Distributors has decided to discontinue manufacturing its X Plus model. Currently, the company has 4, partially completed X Plus models on hand.
The government has put a recall on a particular part in the X Plus model, so each base model must now be reworked to accommodate the style of the new part. Prepare a differential analysis per unit to determine if Trifecta should complete the X Plus models or sell them in their current state.
Figure Extreme Sports sells logo sports merchandise. The company is contemplating whether or not to continue its custom embroidery service. This information is available for the segments.
Figure Hong Publishing has purchased Lang Publishing. After reviewing titles from both companies, a decision must be made to determine what titles must be dropped. The following information is available to make the decision. Currently, the company has 4, partially completed Z Best models on hand. The government has put a recall on a particular part in the Z Best model, so each base model must now be reworked to accommodate the style of the new part. Figure Cable paper company produces many colors of paper.
The current popular color is grey. To increase the production of grey paper, a decision must be made to determine what color must be dropped. Skip to content Short-Term Decision Making. Fundamentals of the Decision to Keep or Discontinue a Segment or Product Two basic approaches can be used to analyze data in this type of decision.
Allocating Common Fixed Costs. Here are some of the factors you should take into account when deciding whether to continue a product line. When deciding whether or not to discontinue a product, the decision should include the total costs, not just per-unit costs. You should review the fixed manufacturing costs, selling costs, transportation and storage costs, customer service costs and any other cost you can tie to the product.
Most of this data should be easily accessible for review if you have a reliable accounting department or bookkeeping service the uses proper cost segregation techniques. It may come as a surprise that in addition to direct financial costs, maintaining a product also has opportunity costs. The time you spend keeping a product up to date could be put towards researching and launching a new product. The physical factory capacity or floor space in your store could potentially be used for other products.
When evaluating a product line, always ask — what else could you be doing? This will help keep you from falling behind and missing opportunities to drive growth. As a subset of opportunity costs, you should also calculate your desired rate of return. Set goals for both profit margin and overall return on investment based on both your other product lines and benchmarks in your industry.
If profits are looking a bit slim, think about what other positive benefits the product is bringing you. If a product is simply absorbing resources with little to no return then it might be a sign to eliminate it. When looking at how much a product costs to keep and sell versus profit made, include the margin, overhead costs, labour costs, maintenance and marketing.
For example, a company might start out with the aim to appeal to a broad market but over the years narrows its focus to one idea or area. Sometimes products remain on the periphery simply because they have been there all along, but ultimately are out of place and unnecessary in the grand scheme.
Is there enough variety in the current product line to compensate for the discontinuation of a product? Will there be a similar or superior product with the ability to replace the lost product and retain customers who previously bought it if need be? Think about perhaps expanding your product catalogue when discontinuing a product. Furthermore, it is said that customer demand should be the first consideration when looking to possibly discontinue a product.
If a product no longer appeals to customers, then it has no value in the market and at the same time no value to your company.
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