Starting an Online Business All-in-One For Dummies®, 3rd Edition

Building Your Inventory

Choosing the best products and prices for your online business is certainly an important factor in starting your new business. You have to consider another issue too: Exactly how much inventory you should keep on hand, or how many different products you should have available for sale. The answer depends on not only the type of products you're selling but also the type of business strategy you want to execute.

Savvy online shoppers are accustomed to an endless array of choices because they can easily jump from one Web site to another. These customers are quick to make a decision about whether your site's inventory meets their expectations.

To keep the attention of most online shoppers, have a clear strategy for what type of, and how much, product you choose to offer.

We don't mean that you have to carry hundreds, or even thousands, of products to find success online. But you can follow a few distinct strategies for building an appropriate online inventory. Each one comes with its own advantages and disadvantages, as discussed in the following sections.

Stocking up as a low-price leader

Competing based on price can be a tricky situation, although it's certainly one option for an inventory strategy. If price is the primary decision-making factor in whether ...