2017-03-29 00:00:00 Self Employed English Implement strong product development practices by defining what should be traded up or down, and how to implement these product changes. https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/06/Woman-at-desk-evaluates-product-inventory-of-jewelry-and-tools.jpg https://quickbooks.intuit.com/ca/resources/self-employed/manipulating-inventory-trading-up-down/ Manipulating Your Inventory by Trading Up and Trading Down

Improving Your Inventory by Trading Up and Trading Down

2 min read

As you change and further develop the products offered within your small business, you’re likely to face decisions about what to change. In some cases, it may make sense for you to add features. In other cases, it may be best to downgrade your products. In either of these two cases, you must work through what customers want and change your inventory to match this demand.

What Trading Up Means

The concept of trading up means you add features to your products. You can make this change happen by upgrading or expanding what you sell. Making your products more elaborate lets you meet more of your customers’ needs, charge higher prices, and offer more specialized inventory. If your products are electronic, consider upgrading the way they can charge, the amount of memory they can store, or their processing speed capabilities. If you design clothing, upgrade to finer materials or implement more elaborate designs. By trading up, you can offer higher-quality inventory and charge more money when you sell it.

What Trading Down Means

You may also come across situations where it makes the most sense to downgrade your product. By stripping your product of certain features, you can better match what your customers want. Removing features during your product development lets you save money and reduce the price of your inventory. If you produce woodworking and add special trim to your products, consider removing or simplifying the designs to save time. Simplifying your products can also make physical inventory easier for customers to use. If you develop and sell software, having too many features can mask what your customers are really trying to find. Eliminating features can improve the product appearance, be easier to use, more functional for your customers purposes, and require less maintenance on your part.

Customer Feedback

As you decide on inventory trading, you should base your decisions on how your customers feel. Continually ask for feedback from your clients with components such as online surveys to understand what they want. Even if you have ideas about how to change your products, you want to make sure you don’t ruin perfectly good items your customers currently enjoy. Consult the opinions of your customers before making any changes, during your adjustment period, and after your new products are released. You should also try to get feedback about what changes to make. Your customers have the most knowledge about what’s needed and what isn’t, so follow their guidance when making changes to your products.

Features vs. Benefits

The features of your products should be related to the benefits your customers want. In addition to getting feedback from your clients, try to figure out what benefits you want to give to your customers. Every feature you include in your product should have a meaning. You shouldn’t see the features of your product as the goal in product development. Instead, decide what benefits you want your customers to receive and how to deliver those benefits. This may happen by trading up or trading down. Determine how you can change your products to better suit your customers’ needs, whether it’s by adding or removing features.

While you focus on maximizing your inventory, take a further step towards success by utilizing powerful resources to keep your product and finances organized. QuickBooks Self-Employed app helps freelancers, contractors, and sole proprietors track and manage their business on the go. Download the app.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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