Starting an online store can be an exciting yet daunting task. One of the first questions aspiring e-commerce entrepreneurs face is how many products they should offer when first launching their business. The number of items to begin with is an important consideration that can impact everything from business operations to conversion rates.
What are the factors to consider when deciding initial product range?
There are several key factors to think about when determining your initial product selection for a new online store:
- Your business model – Are you dropshipping, making/designing products in-house, wholesaling, etc? This impacts how many SKUs you can realistically manage.
- Your product niche – The breadth of your niche affects the variety needed. A narrow niche like custom dog collars needs less SKUs than general jewelry.
- Production and inventory capacity – Can you physically make, store and manage dozens to hundreds of different products from the start?
- Funds and operating costs – The more items, the higher your upfront product and operational costs.
- Stage of business – Early stage eCommerce startups should keep their inventory minimal.
- Future expansion goals – Will you add more products once established? Beginning with fewer items gives room to grow.
It’s about finding the ideal balance for your specific situation between too few and too many products. The last thing you want is a sparse store with little selection that turns off customers. However, going overboard with hundreds of items right away can quickly become unmanageable.
What are the pros and cons of starting with few items?
Beginning your online store with just a handful of carefully selected products has some notable upsides:
Pros:
- Lower startup costs – You need less initial capital for production/inventory.
- Focus your efforts on highest quality – More time to perfect each item.
- Easier to manage operations – Simpler to organize and handle few SKUs.
- Minimal wasted inventory – Less risk of unsold items.
- Targeted brand image – Position yourself as specialized before expanding.
Cons:
- Lower perceived selection – Customers may think range is too narrow.
- Lower revenue potential – Fewer items means fewer sales.
- Less opportunities for impulse purchases – A limited catalog provides fewer chances for shoppers to buy more.
- Harder to attract search traffic – Minimal products make SEO difficult initially.
What are the pros and cons of starting with many items?
On the other hand, launching right away with an extensive product catalog has some advantages too:
Pros:
- Maximize revenue potential – More products equal more sales opportunity.
- Increased impulse purchases – A wide selection encourages customers to buy more per order.
- Appeal to wider audience – You can attract various customer types with broad inventory.
- Gain traction with SEO – A larger catalog makes search engine optimization easier.
- Highlight yourself as established – An extensive range gives the impression your store is already mature.
Cons:
- Higher startup costs – Significant upfront funds required for large inventory production/purchases.
- Difficult to manage – Lots of SKUs make organization more complex and prone to mistakes.
- Excess inventory risk – More unused stock that could go to waste.
- Dilution of brand image – Lacking focus if you sell unrelated items.
- Lower product quality – Challenging to control consistency across many different products.
How many products do successful online stores start with?
Looking at what successful ecommerce businesses actually did when first launching can provide guidance on ideal starting SKU counts:
- Amazon – Began in 1995 selling books online, first offering around 150,000 titles.
- eBay – Originally auctioned collectibles in 1995, quickly expanding categories.
- Etsy – Focused on handmade goods with around 20,000 items when they started in 2005.
- Bonobos – Launched in 2007 with just one core product – men’s pants – in several fits and colors.
- Dollar Shave Club – Started with a single subscription razor product when founded in 2011.
These examples highlight a few common approaches. Some commerce giants like Amazon and eBay began with an enormous product range right away. Specialized stores like Bonobos and Dollar Shave Club started very targeted. Etsy struck a balance in the middle with a relatively small catalog tailored to their handmade niche.
How can I split up my inventory when first opening my store?
Rather than randomly picking a certain number of products to start with, it is strategic to break up your initial inventory into logical groupings. This makes the purchasing and production process more organized. Ways to categorize your opening product selection include:
- By section – Ex. categories like jewelry, clothing, shoes
- By type – Ex. product lines like t-shirts, mugs, phone cases
- By attribute – Ex. color, size, design
- By season – Ex. summer vs winter items
- By theme – Ex. related prints, materials, usage occasions
- By order – Ex. good, better, best price points
This intentional division of your starting catalog not only keeps it manageable, but also helps identify gaps to fill as your item assortment expands over time.
How many products should I launch my online store with?
Taking all factors into account, here are general guidelines for ideal starting product quantities based on your business model and stage:
| Business Type | Starting # of Products |
|---|---|
| Handmade goods | 10-50 SKUs |
| Physical product manufacturing | 25-150 SKUs |
| Wholesale/white label | 50-200+ SKUs |
| Dropshipping | 50-500+ SKUs |
| Niche focus | 15-75 SKUs |
| General store | 50-250+ SKUs |
| Startup/MVP store | 15-100 SKUs |
| Established brand | 50-500+ SKUs |
These ranges account for differences in production capacity, operating capabilities, and existing brand development across business models. For example, a handmade jewelry startup would stock far less than an electronics wholesaler.
Tips for choosing your initial products
Some key tips for selecting which items to offer right away in your new online store include:
- Determine your product niche and positioning first.
- Focus on your core best-selling items or signature products.
- Choose affordable items requiring lower production/purchase costs.
- Offer a logical mix of simpler and more complex products.
- Include some impulse purchase items like decor accents and accessories.
- Make sure products complement each other and your brand image.
- Aim for products with wider appeal and target demographics.
- Select seasonally-appropriate and evergreen staple products.
- Consider both trending and classic products for variety.
How can I scale my product catalog over time?
Once your online store is up and running, you can methodically scale your catalog over time. Try these inventory growth strategies:
- Add next best selling items in your existing niches.
- Expand into adjacent niches and categories that fit your brand.
- Introduce seasonal products on a calendar schedule.
- Use data like Google Trends to identify rising product trends to tap into.
- Monitor competitors and industry leaders for new product inspiration.
- Solicit customer feedback to discover in-demand items to add.
- Capture email signups immediately to survey subscribers about new products.
- Consider limited edition and seasonal products to increase variety.
Growing your catalog expands your audience reach and converts one-time buyers into repeat customers. But scale up strategically in manageable chunks. Jumping from 50 to 500 items overnight can drastically strain operations. Target steady product mix growth of 10-20% more SKUs each season or quarter.
Key takeaways
Determining the ideal products to start your online store with involves careful consideration of multiple factors. Keep these conclusions in mind:
- Begin with at least ~15 products so you don’t limit selection but avoid the unmanageable complexity of hundreds of items immediately.
- Focus on providing your absolute best products first to make a strong first impression.
- Separate inventory into logical groups by type, season, attributes, etc to simplify purchasing and production.
- Select affordable items requiring lower startup capital along with some unique signature products.
- Offer a thoughtful mix of products that align with your brand image and target demographic.
- Scale your catalog gradually over time as capabilities allow to profitably expand your business.
By beginning with a tightly curated but not overly sparse product assortment, your new ecommerce venture will get off to a streamlined yet compelling start. Use the initial launch phase to perfect operations and identify top selling items before widening your selection to convert more customers and drive sustainable growth.
